"I think this is a decade-long price fight. Every quarter is a new round, but Walmart's coming back," Johnson said on CNBC's "Fast Money."
The former J.C. Penney CEO has been bullish on Walmart since at least February, when he appeared on "Fast Money" and called the big box retailer's rally. On Thursday, Walmart shares had their best day in nine years. With stock up 44 percent year-to-date, Walmart appeared to confirm Johnson's predictions that it could be Amazon's biggest threat.
Amazon may be growing fast, but Johnson thinks Walmart has a decided advantage with its preexisting brick-and-mortar infrastructure. He explained that most Americans live near a Walmart where they can buy most of what is available on Amazon.
As Amazon continues to invest in its distribution centers, Walmart has chosen to slow store growth, focusing instead on the technology it needs to improve the stores it already has — a considerably cheaper endeavor.
And Johnson maintains that Amazon's distribution centers are more expensive and less efficient to run than Walmart's store and warehouses.
"They forward deploy inventory into things called warehouses, that are really stores. They are a lower cost operation than amazon's distribution centers," Johnson said.
"Having that distribution footprint with that inventory forward deployed is an advantage that is hard to beat," he added.
As for Amazon, Johnson thinks acquisitions like Whole Foods, are a good move for the internet retailer. And Target is right on brand.
"Whole Foods is to grocery, what Target is to mass. It's the upscale discounter," he said.
While Johnson doesn't anticipate that mega-acquisition anytime soon, he said he does think Target has all the right amount of space in all the right places for Amazon to stay on top of the competition.
"Target's got 1,500 stores on Main and Main of every city in the country," Johnson said.