Walmart has become the first traditional retailer to hit a $1tn (730bn) market valuation, propelling it into a small group dominated by tech firms.

The milestone reflects the US retail giant's booming e-commerce business and its success in drawing in price-conscious shoppers. Wall Street has also responded enthusiastically to its investments in artificial intelligence (AI).

Walmart joins an elite club of mostly tech firms, including Nvidia and Alphabet, with valuations over $1tn.

The company's share price, which has soared in recent months, rose by more than 3% on Tuesday.

Walmart is the biggest brick-and-mortar retailer in the US and is known for its low prices. It has benefited from a trend of higher earners trading down to lower-priced items, as the jobs market cools and inflation persists. Its speedy home-delivery offering has also attracted shoppers across income brackets.

It reported strong sales across key sectors in its November earnings update, including grocery and clothing.

"Walmart is better insulated than just about anybody given the value proposition we have," John David Rainey, Walmart's chief financial officer, said at the time.

Walmart executives have said the effects of US President Donald Trump's tariffs have been more muted than initially expected. While tariffs have raised prices for items like electronics and toys, the retailer's scale has allowed it to weather the import taxes better than some rivals.

Walmart's online business has helped it emerge as a competitor to Amazon. E-commerce sales in the US jumped 28% in the three months to 31 October, propelled by online orders and advertising.

Still, Amazon's market value currently stands at $2.6tn - more than double Walmart's.

Wall Street investors have embraced Walmart's adoption of AI, helping push the company's valuation to new highs.

The firm reached the $1tn milestone during chief executive John Furner's first week at the helm of the company. Furner has been a vocal backer of its AI investments.

In October, the company announced a partnership with OpenAI, which it said "allows customers and Sam's Club members to plan meals, restock essentials, or discover new products simply by chatting".

Walmart's decision late last year to move its stock from the New York Stock Exchange to the tech-heavy Nasdaq reinforced the retailer's push to be seen as a digital company.

Walmart is the first traditional retailer to join the $1tn market capitalisation club. The group is still dominated by tech giants, though investment firm Berkshire Hathaway reached the milestone in 2024.

Drug-maker Eli Lilly also surpassed $1tn late last year before falling back below the threshold.