Walmart (WMT) shares climbed 1.9% on Tuesday, closing at $119.42 in after-hours trading, adding approximately $17.8 billion to its market capitalization. The gain came as the broader market declined, with the S&P 500 falling 1.44% and the Nasdaq dropping 2.21%. The consumer staples sector within the S&P 500 rose 1.8%, indicating a defensive rotation by investors amid tech weakness.
Applying the sector's 1.8% increase to Walmart's prior market cap accounts for roughly $16.9 billion of the day's gain, leaving only about $900 million attributable to company-specific factors. This suggests the bulk of the move was sector-driven rather than a direct response to the company's announcement of its $1.4 billion acquisition of Vibe.co, a connected-TV advertising platform.
Vibe.co Acquisition Details
The Wall Street Journal reported that Walmart is acquiring Vibe.co, a self-serve connected-TV ad platform with over 10,000 advertisers. The deal is expected to close by the end of fiscal 2027, and Walmart stated it will not alter its sales or operating-income growth guidance for that year. Connected TV refers to television content delivered over the internet.
Ryan Mayward, who leads Walmart Connect U.S., commented, “We want commerce media to be more accessible, more measurable and easier to activate.” Vibe CEO Arthur Querou told AdExchanger that the company aims to “build the best ecosystem for the performance TV market.”
Strategic Implications
Walmart is leveraging its vast trove of store and online sales data to prove that streaming advertisements lead to actual purchases. The company hopes this measurement capability will attract advertising dollars away from Amazon and other rivals.
Walmart’s advertising business is growing rapidly, outpacing its core retail operations. Global advertising sales surged 37% in the quarter ending April 30, while U.S. ad revenue rose 36%. Walmart Connect, excluding Vizio, was up 44%. Total revenue for the quarter increased 7.3% to $177.8 billion, with operating income 5% higher.
Broader Retail Competition
The retail landscape is highly competitive this week, with Amazon, Walmart, and Target all running promotional events. Amazon’s Prime Day began Tuesday and spans four days, while Walmart’s week-long sale started Monday. Target’s sale coincides with Amazon’s. Bank of America estimates Amazon could generate $21.6 billion in sales during Prime Day, and eMarketer predicts Amazon will capture over 60% of spending during the four-day period. “Shoppers will go to whichever store has the absolute cheapest price,” said William Stern, CEO of Cardiff, as reported by Reuters.
Nuclear Power Agreement
In a separate development, Walmart announced its first nuclear power purchase agreement, securing approximately 176 megawatts from Constellation Energy through two 15-year contracts starting in 2029 and 2030. The power will supply a future distribution center in Illinois. The agreement includes a 30-megawatt uprate, an output boost from an existing plant. Shayne Wahlmeier, Walmart’s energy chief, emphasized the focus on “affordable, reliable, and clean energy.”
Risks and Valuation
Despite the positive momentum, risks remain. If the defensive rotation into staples fades and Vibe.co fails to deliver immediate returns, Walmart could face headwinds. The stock trades at roughly 42 times trailing earnings, a high multiple that may be difficult to sustain if heavy discounting during the promotional week drives sales but not profits. Slower ad revenue growth could also make it harder to justify a valuation typically reserved for tech stocks.
