Quick Tips: Here's the Best Trade Off Walmart's Surprise Quarter

 | Feb 20, 2018 | 10:54 AM EST
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Just hopped off the phone with Walmart's (WMT) CFO. Here is the overall takeaway. 

No, Walmart's share price plunge Tuesday does not mean the world is ending. Although that would be a natural instinct watching a big-cap stock like Walmart dive 9% on earnings day. My sense off the call is that Walmart will use at least the first half of 2018 to invest a good bit in its people, processes and e-commerce. Don't underestimate the company finding new areas to slash costs to offset some of these pressures.

But in the near-term, Walmart's strong top line will play a backseat to concerns over its profit margins. The reality is that competing online, frankly, is no joke. It's getting more ruthless every single minute as large retailers like Walmart invest, invest, invest. Who are they investing to try and catch? Amazon (AMZN) , no less.

Amazon long is the hot trade off Walmart's numbers, and likely mixed online results elsewhere in big box retail (looking at you, Target (TGT) ). At least provided we don't see another market correction in which momentum tech names are sold hand over fist.

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