Should Investors Be Concerned That Walmart Got Kicked Out of the $1 Trillion Club and Now the $900 Billion Club?

It was only this past February that Walmart (WMT +1.51%) surged to a market capitalization of more than $1 trillion. That milestone is rarefied air: Just a handful of companies have ever reached that mark. Walmart was shining bright on Wall Street as its e-commerce and digital advertising businesses boomed, and shareholders were thrilled.

Now, just five months later, Walmart has shed more than $100 billion in market cap, and its market cap recently dipped below $900 billion. The main reason for that slide was that Wall Street had unreasonably high expectations for the retail giant.

So, should investors be concerned or see this as an opportunity to buy Walmart at a better price?

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NASDAQ: WMT

Walmart

Today's Change

(1.51%) $1.69

Current Price

$113.90

Key Data Points

Market Cap

$906BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.Market cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day's Range

$111.93 - $114.16

52wk Range

$94.38 - $135.16

Volume

12.5M

Avg Vol

21.9M

Gross Margin

24.98%

Dividend Yield

0.85%

In Walmart's fiscal 2027 first quarter, which ended May 1, it beat analysts' consensus revenue estimates. Still, because the company only met profit expectations and reaffirmed its full-year guidance rather than raising it, the stock pulled back following its May 29 report.

Image source: The Motley Fool.

The sell-off that followed feels more like an overreaction than a necessary correction. Walmart's e-commerce and advertising businesses are growing at double-digit percentage rates, and its fundamentals are incredibly strong.

This doesn't mean the company isn't facing real headwinds, though. Tariffs and higher inflation are applying pressure. The stock is also still trading at a premium, particularly compared to some retail peers such as Target. Walmart announced earlier this week that it is reducing prices to entice cash-strapped shoppers. This move should help boost sales in the upcoming quarter and appease a hard-to-please Wall Street.

Ultimately, Walmart remains a strong buy for long-term investors. The stock offers solid growth and an annual dividend of $0.99 per share that, at current share prices, yields about 0.9%. Even with its market cap sitting below $900 billion again, it's still one of the best companies in the world to own.