Amazon (AMZN) is now worth more than Wal-Mart (WMT). The two companies' market caps are below:

At first glance, Amazon being more valuable than Wal-Mart doesn't seem thatunusual. After all, Amazon is the future, and Wal-Mart is the past, right?

Looking a little closer, Amazon being more valuable than Wal-Mart starts to seem strange. Both companies' sales over the last 12 months are below:

Wal-Mart generates 5.1x as many sales as Amazon. That's not a minor spread… It's a HUGE difference. Wal-Mart had more sales (adjusted for inflation) in 1994 than Amazon has today. Despite generating 5.1x as much sales as Amazon, Wal-Mart is worth less than Amazon.

Of course, sales are not everything. In business and investing, the bottom line matters. The net profit over the last 12 months of both companies is below:

Clearly, one of these companies is more lucrative than the other. Amazon is still not profitable. He company last $188 million dollars over the last 12 months. While Amazon is not profitable on a GAAP basis, there is more to the story here than meets the eye – which will be discussed a little later on in this article.

Wal-Mart, on the other hand, is extremely profitable. Wal-Mart made enough money over the last 12 months to buy the entire Whole Foods (WFM) company (based on its $14.6 billion market cap). I'm not saying Wal-Mart should buy Whole Foods – they are very, very different businesses. This example just shows the massive earnings power of Wal-Mart.

When given the choice between a highly profitable company and an unprofitable company, I would much rather choose the one that makes money over the one that does not. Businesses are in business primarily to make money. Wal-Mart is a money making machine. Amazon is not.