ETFs in Focus as Walmart Loses Its Largest Retailer Title to Amazon

In a landmark shift in the retail landscape, Amazon AMZN has officially dethroned Walmart WMT as the world’s largest retailer in terms of annual revenues. For the first time, the e-commerce and tech giant’s 2025 revenues of $716.9 billion surpassed Walmart’s $713.2 billion, ending the big-box retailer's long-standing reign at the top.

While the news is a win for Amazon, the real opportunity for investors may lie in the exchange-traded funds (ETFs) that hold this new king of retail alongside other leaders from retail and other sectors.

This symbolic changing of the guard, highlighted by major financial outlets, shines a spotlight on the companies driving modern commerce — and the ETFs that give investors exposure to them.

As investors assess the implications of this “changing of the guard,” understanding the drivers behind Amazon’s milestone, and how to gain exposure to the winner, becomes critical.

The Catalyst: More Than Just a Retail Boost

While the headlines focus on "retail," the primary catalyst that propelled Amazon past its brick-and-mortar rival is its high-margin technology ecosystem. Amazon Web Services (“AWS”), the company’s cloud computing arm, generated nearly $129 billion in sales last year. In the current "AI arms race," corporations are flocking to AWS for the data center infrastructure required to build and deploy generative AI models.

Amazon’s advertising business has become a major growth engine, generating more than $60 billion annually and expanding at a faster pace (and with higher margins) than its traditional grocery operations. This "flywheel" of retail, cloud, and ads created a powerful financial engine that traditional retailers like Walmart struggled to match.

For investors, Amazon’s new status as the largest company by sales reinforces its position as both a retail and technology bellwether, making it a more appealing investment prospect for those seeking exposure to secular themes like digital retail, cloud and AI.

Why Focus on ETFs & Not Amazon?

Given the recent outperformance, an investor might be tempted to buy Amazon stock. However, a single stock, even one as dominant as Amazon, carries company-specific risks, such as heavy AI and data center capex, intensifying cloud competition from Microsoft and Alphabet, and evolving regulatory scrutiny over market power and labor practices, all of which can unsettle the market and trigger sharp single-stock volatility.

By contrast, Amazon heavy ETFs allow investors to capture the upside of its newfound scale while spreading risk across other leading retailers, cloud players and tech platforms, blunting company-specific volatility but still depending on the structural trends that helped Amazon overtake Walmart in the first place. This makes a basket approach an appealing way to express a bullish view on Amazon’s ecosystem without tying portfolio outcomes solely to a single corporate narrative.

Amazon-Heavy ETFs to Watch

Against the current backdrop, investors may consider the following ETFs for their watchlist: 

Global X PureCap MSCI Consumer Discretionary ETF GXPD

This fund, with net assets worth $22.72 million, offers exposure to 50 consumer discretionary stocks. AMZN holds the first position in this fund, with 33.74% weightage. Tesla TSLA and Home Depot HD hold the second and third positions in this fund, with 19.48% and 6.35% weightages, respectively. 

The fund charges 15 basis points (bps) as fees. It traded at a volume of 0.009 million shares in the last trading session. 

Vanguard Consumer Discretionary ETF VCR

This fund, with net assets worth $6.3 billion, offers exposure to 285 U.S. stocks within the consumer discretionary sector. AMZN holds the first position in this fund, with 23.02% weightage. TSLA and HD hold the second and third positions in this fund, with 17.06% and 5.02% weightages, respectively. 

The fund charges 9 bps as fees. It traded at a volume of 0.04 million shares in the last trading session. 

State Street Consumer Discretionary Select Sector SPDR ETF XLY

This fund, with assets under management (AUM) worth $22.51 billion, offers exposure to 48 companies in specialty retail; broadline retail; hotels, restaurants and leisure; textiles, apparel and luxury goods; household durables; automobiles; automobile components; distributors; leisure products; and diversified consumer services. AMZN holds the first spot in this fund, with 20.91% weightage. TSLA and HD hold the second and third positions in this fund, with 19.51% and 6.36% weightages, respectively. 

The fund charges 8 bps as fees. It traded at a good volume of 16.64 million shares in the last trading session.

ProShares Online Retail ETF ONLN

This fund, with an average market cap worth $177.12 billion, offers exposure to 19 online retail stocks. AMZN holds the first spot in this fund, with 23.35% weightage. Alibaba BABA and eBay EBAY hold the second and third positions in this fund, with 8.85% and 7.26% weightages, respectively. 

The fund charges 58 bps as fees. It traded at a volume of 0.02 million shares in the last trading session.

VanEck Retail ETF RTH  

This fund, with net assets of $264.8 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. AMZN holds the first spot in this fund, with 17.08% weightage. WMT and Costco COST hold the second and third positions in this fund, with 12.50% and 9.03% weightages, respectively. 

The fund charges 35 bps as fees. It traded at a volume of 0.008 million shares in the last trading session.

Invesco QQQ QQQ

This fund, with a market value worth $400.39 billion, offers exposure to companies listed on the Nasdaq Stock Market based on market capitalization. AMZN holds the fourth spot in this fund, with 4.30% weightage. NVIDIA NVDA (8.97%), Apple AAPL (7.56%) and Microsoft MSFT (5.83%) hold the first three positions in this fund. 

The fund charges 18 bps as fees. It traded at a volume of 74.07 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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