The Walmart Effect: ETFs in Focus After WMT Joins the $1 Trillion Club

In a landmark achievement, Walmart Inc. WMT officially hit a $1-trillion market capitalization on Feb. 3, 2026, propelled by a remarkable 28% stock surge over the past year. This milestone catapults the retail behemoth into an elite circle of corporations — a club historically dominated by technology giants like Nvidia NVDA and Alphabet GOOGL. 

Walmart's entry in the trillion-dollar club is particularly significant as it marks the first time a traditional retailer has attained this valuation, a testament to its successful digital transformation.

This historic milestone immediately shines a spotlight on exchange-traded funds (ETFs) that hold significant stakes in the company. For many investors, ETFs offer a primary avenue to gain exposure to Walmart's growth without purchasing individual shares. As Walmart's valuation climbs, its weight within major retail-focused ETFs increases, making these funds a crucial watchlist item for anyone tracking the ripple effects of this market move.

The Engine Behind the Trillion-Dollar Valuation

Walmart’s ascent to a trillion-dollar valuation was fueled by a radical transformation from a "big-box store" into a tech-driven ecosystem. Key data points that led to this growth include:

The AI Revolution: Walmart aggressively integrated AI into its supply chain, improving inventory forecasting and search functionality. A landmark partnership with Google Gemini in early 2026 allowed shoppers to buy products directly through AI chatbots, cementing its status as the "new AI giant."

E-commerce Dominance: For the third quarter of fiscal 2026, Walmart reported a staggering 27% rise in global e-commerce sales, as the company successfully competed with Amazon through services like curbside pickup and speedy delivery.

High-Margin Revenues: Beyond selling groceries, Walmart has built a $4 billion advertising business, Walmart Connect, which carries higher operating margins than traditional retail and has significantly boosted the company’s overall profitability.

Customer Base Expansion: During periods of elevated inflation, Walmart's "Everyday Low Price" (EDLP) strategy attracted higher-income shoppers, broadening its demographic reach.

What Lies Ahead?

Walmart’s addition to the tech-heavy Nasdaq-100 earlier this year signals its intent to be valued like a high-growth technology stock. Analysts are particularly bullish on its expansion into pharmacy-based healthcare and the continued growth of Walmart+, which creates a recurring revenue stream similar to Amazon Prime.

The company’s steady investments in artificial intelligence (AI) should continue to add impetus to its share price in the days ahead. Walmart’s recent partnership with OpenAI, enabling customers to browse and purchase products directly via ChatGPT, is noteworthy.

However, holding any single stock, even one as robust as Walmart, comes with concentration risk. A sudden regulatory change, a dip in consumer spending, or a leadership misstep may impact its share price independently of its performance.

Thus, for investors seeking exposure to Walmart's potential while mitigating single-stock risk, a strategic alternative is to invest in Walmart-heavy ETFs. These funds provide diversified exposure, spreading risk across the broader retail sector or the entire market while maintaining a meaningful stake in the retail giant's future.

Walmart-Heavy ETFs in Spotlight

Considering the aforementioned discussion, if you want to capitalize on Walmart’s momentum while maintaining a balanced portfolio, keep the following ETFs on your watchlist:

State Street Consumer Staples Select Sector SPDR ETF XLP

This fund, with assets under management (AUM) worth $16.81 billion, offers exposure to 36 companies from consumer staples, distribution & retail; household products; food products; beverages; tobacco; and personal care products industries in the United States. WMT holds the first spot in this fund, with 11.88% weightage. 

XLP has gained 9.4% over the past year. The fund charges 8 basis points (bps) as fees. It traded at a volume of 33.75 million shares in the last trading session. 

Vanguard Consumer Staples ETF VDC

This fund, with net assets worth $7.7 billion, offers exposure to 104 companies that manufacture and distribute food, beverages, and tobacco, as well as producers of nondurable household goods and personal products. WMT holds the first spot in this fund, with 15.07% weightage. 

VDC has rallied 8.1% over the past year. The fund charges 9 bps as fees. It traded at a volume of 0.27 million shares in the last trading session. 

Fidelity MSCI Consumer Staples Index ETF FSTA

This fund, with net assets worth $1.39 billion, offers exposure to 97 consumer staples companies. WMT holds the first spot in this fund, with 14.95% weightage. 

FSTA has gained 7.8% over the past year. The fund charges 8 bps as fees. It traded at a volume of 0.52 million shares in the last trading session. 

VanEck Retail ETF RTH

This fund, with net assets of $267.6 million, offers exposure to 26 companies involved in retail distribution, including wholesalers; online, direct mail, and TV retailers; multi-line retailers; specialty retailers; and food and other staples retailers. WMT holds the second spot in this fund, with 12.50% weightage. 

RTH has rallied 9.4% over the past year. The fund charges 35 bps as fees. It traded at a volume of 0.002 million shares in the last trading session. 

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

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