James Brumley, The Motley Fool

Sun, Jun 8, 2025, 12:52 PM7 min read

• Walmart.com’s high-margin ad revenue is growing at a brisk pace but has only scratched the surface of its potential.

• With the U.S. retail landscape now well saturated, the company is proving there’s plenty of opportunity overseas.

• The brick-and-mortar retailing giant is also more of an e-commerce player than you might think.

• 10 stocks we like better than Walmart ›

When most investors are thinking about buying a particular stock, they'll start by looking at the underlying company's recent fiscal results. And to be fair, it's a sound approach. Although past performance is no guarantee of future results, that past gives us a reasonably good idea of what the future likely holds.

Still, sometimes we need to dig deeper and examine the qualitative things a company is doing that could alter its quantitative future.

With that as the backdrop, although there's not much unpredictability with its business, Walmart (NYSE: WMT) and its stock are apt to be somewhere pleasantly surprising in the next three years. Here's why.

Walmart is the world's biggest brick-and-mortar retailer, with 90% of U.S. residents living within 10 miles of one of its 4,600 domestic namesake stores, or one of its 600 Sam's Club warehouses. There are almost 5,600 other locations outside of the United States as well.

Last year this giant of a company did $681 billion worth of business, turning $19.4 billion of that into after-tax net income, and extending long-standing (even if occasionally bent and sometimes slow) growth trends. And yes, those numbers confirm the retailer continues to dominate at least North America's general merchandise and grocery retailing landscapes.

But the Walmart of yesteryear -- and even the Walmart of today -- isn't quite the Walmart you can expect come 2028. There are several initiatives underway right now that should be measurably more mature three years from now, each of which could make a positive impact on its top and bottom lines.

One of these initiatives is its nascent online advertising business.

If you ever shop at Walmart.com then you've seen advertisements, probably without even giving it a second thought. Every website runs ads these days, after all.

Except, Walmart isn't simply hoping to prompt you into making a purchase of something it's selling. Brands are paying Walmart to promote their particular goods online with these ads. The retailer did $4.4 billion worth of this high-margin advertising business, in fact, up 27% year over year, and bolstering the bottom line for an e-commerce platform Walmart was going to operate anyway. This still only scratches the surface of the opportunity, though. With an ever-growing amount of insight as to what works and what doesn't, this advertising revenue's growth accelerated to a pace of 31% year over year during the first quarter of this year.