Innovation at Walmart: How the Retailer Cracked the Code of 21st-Century Success

Switches and (Index) Evolution

It was the early 1990s in west suburban Chicago. I was a teenager and had just started working as a golf caddy. Grunge music was bursting on the alternative airways, and an evolution was underway in retail.

My job provided some disposable income. Throughout the 1990s, much of my spending was funneled into music. Like other consumers, my capital was constrained. I wanted to save up for a car and college…but I also wanted Nirvana’s Nevermind, Pearl Jam’s Ten, and U2’s Achtung Baby.

The compact disk was the ascendent musical format, but it was also expensive. A CD cost $18 at Sam Goody. Best Buy might have the same album for $16. That’s roughly $35 adjusted for inflation. Then Walmart (WMT) opened in the same suburban strip mall as the competition. Safe to say I switched my business.

Constant Innovation

For decades, Walmart has been an innovator. Its management embraced technology early and often. Walmart's transformation exemplifies how 21st-century success demands continuous evolution — a principle now encoded in the DNA of the Nasdaq-100 Index®.

Last week, there was a piece in Inc Magazine that highlighted the modern WMT. The transformation wasn't gradual, it was revolutionary.

The Big Picture

Walmart reached a $1 trillion market cap by transforming from a traditional retailer into a tech company over just 3 years, even moving its corporate stock listing to Nasdaq, alongside tech giants.

Three Key Transformations:

1. AI-Powered Data Overhaul

• Used AI to clean 850 million lines of product data in late 2024
• Task would have required 100x the staff and a decade if done manually
• Dramatically improved search accuracy and customer experience

2. High-Margin Advertising Business (Walmart Connect)

• Ad sales jumped 53% in late 2025
• Advertising margins of 70-80% vs. typical retail margins of 3%
• Leveraging "closed loop" data: 90% of Americans live within 10 miles of a Walmart
• Tracking what customers see on devices (like Vizio TVs) to what they buy in-store
• Advertising and Walmart+ now generate ~⅓ of operating income

3. Stores as Fulfillment Centers

• Converted 4,700 stores into automated distribution hubs
• AI-driven logistics enable same-day delivery to 95% of U.S. households
• E-commerce became profitable as a standalone unit in 2025
• Scaled revenue while keeping workforce flat at 2.1 million employees

WMT, PLAT, NDAQ, and NDX

As the WMT management team was embracing AI, streamlining operations, and boosting margins, it was also in conversation with Nasdaq about its stock listing. For more than half a century, its shares were listed on the NYSE. That changed following its announcement on November 20, 2025.

Source: YCharts & Nasdaq Index Options

The press release from WMT cited: “Moving to Nasdaq aligns with the people-led, tech-powered approach to our long-term strategy.”

There’s a couple of other important points worth highlighting.

From an investor’s perspective, the decision has been meaningfully rewarded over the past two and a half months. WMT stock has added ~30% since the switch announcement. The market capitalization for the largest “retailer” in the world moved from ~$800 billion to more than $1 trillion during the first week in February.

A potential ancillary consideration for companies with respect to their listing involves index membership. Only Nasdaq-listed companies are eligible for inclusion in the Nasdaq-100 Index® (NDX®).

NDX has become a globally recognized collection of 100 of the most innovative, large-cap companies. Walmart, and others, including Palantir (PLTR), almost certainly considered the potential impact of inclusion when making a consequential listing decision.

In early January, Nasdaq announced that WMT would become an NDX component. A similar progression played out with PLTR roughly a year earlier. Shares of both WMT and PLTR have vastly outpaced essentially all market benchmarks since their moves to the Nasdaq stock market.

Source: YCharts & Nasdaq Index Options

Darwin to Dollars

Darwin’s “Survival of the Fittest” supposition plays out in nature and capital markets. The financial narrative involves the ongoing evolution of an equity index that many still view as a “tech bellwether.” That potentially anachronistic thinking is being re-examined by investors of all types.

In the modern economy, adaptation is the expectation. As consumers and investors, we vote with our pocketbook. NDX constituency is arguably an indication of “economic fitness.” NDX has become “the benchmark for the 21st century” and membership really does have its privileges.

Back to the Future

As my son approaches the age when I was buying grunge albums, he’s able to use a Microsoft laptop, the Google search engine, and get things he might need on Amazon, Walmart, Costco, or Shopify.

The computer is powered by semiconductors that NVIDIA, Broadcom, AMD, Intel, or Texas Instruments may have produced.

Tonight, maybe we’ll order DoorDash, pop on the television, connected by a Cisco server via Applied Materials inputs to stream a movie on Netflix which is bidding for Warner Brothers Discovery. He’s not worried – I’ll pay the Comcast and Exelon bills.

Meanwhile, I’m approaching an age when I may need Amgen, Gilead Sciences, Vertex Pharmaceuticals, or Regeneron products. Hopefully I can avoid needing Intuitive Surgical devices used on me in the near term.

Over the weekend, I may let him have Pepsi and I’ll have a diet Dr. Pepper, and we’ll share snacks from Mondelez. I can get Starbucks coffee or a Monster Beverage in the morning before I pop into O’Reilly Automotive to get new windshield wipers. I’ll need them in case there’s rain on the trip to Iowa next month where we’ll stay at a Marriott property.

I already know that the Nasdaq-100 Index expands well beyond tech. As my son's generation inherits this economy, it'll judge companies not by their industry label, but by their ability to innovate. In that world, ”technology company” isn't a sector, it's a survival strategy. And the index that captures that reality becomes not just a benchmark, but a mirror of economic evolution itself.

Every highlighted name is a unique NDX constituent.