Walmart Advertising Surges 46%: Hidden Profit Engine Emerging?

Walmart Inc.’s WMT advertising growth was a major highlight in the second quarter of fiscal 2026, showing how the company is creating a new source of revenues beyond traditional retail sales. Walmart's global advertising business surged 46%, including VIZIO. Even excluding VIZIO, Walmart Connect in the United States expanded 31%, while advertising at Sam’s Club U.S. climbed 24%. International markets, such as Flipkart, added 15% to the growth. 

Advertising is reshaping Walmart’s income statement by delivering higher-margin growth compared to core retail. With marketplace sales up nearly 20% and 44% of marketplace volume now fulfilled through Walmart services, the advertising engine is increasingly tied to the expansion of Walmart’s digital ecosystem. Advertising, alongside membership fees, is contributing to the company’s profit transformation and providing flexibility to navigate tariffs, cost inflation and pricing rollbacks. 

The surge in ad sales also reflects Walmart’s ability to monetize traffic as e-commerce scales, with global digital sales up 25% in the second quarter. Management highlighted that these results are not just incremental revenue streams but also structural shifts in the company’s profit profile, positioning advertising as a hidden yet increasingly powerful driver, providing resilience against cost pressures and strengthening Walmart’s omnichannel strategy for the long term.

What Latest Metrics Say About Walmart

Walmart, which competes with Costco Wholesale Corporation COST and Target Corporation TGT, has been a standout performer, with shares rallying 29.8% in the past year, almost in tandem with the industry’s growth of 30%. Shares of Costco have advanced 8.8%, while Target declined 38.2% in the aforementioned period.
 

From a valuation standpoint, Walmart's forward 12-month price-to-earnings ratio stands at 36.62, higher than the industry’s 33.51. WMT carries a Value Score of C. Walmart is trading at a premium to Target (with a forward 12-month P/E ratio of 11.52) but at a discount to Costco (49.21). 
 

The Zacks Consensus Estimate for Walmart’s current financial-year sales and earnings per share implies year-over-year growth of 4% and 3.6%, respectively. 
 

Walmart currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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