Amazon and Costco have greatly outperformed the market over the last decade, making them notable investment options. Amazon’s shares have increased by 566%, while Costco’s have risen by 533%, both significantly beating the broader market.
Amazon’s Diverse Growth Opportunities
Amazon stands out for its leadership in various sectors due to its culture of innovation. Its logistics network ensures fast shipping, while Amazon Web Services thrives, especially with the rise of artificial intelligence.
Amazon also benefits from a strong brand and significant financial resources, creating a tough competitive environment. Its price is currently $226.36, with a market cap of $2.4 trillion, and has a gross margin of 50.05%.
Costco’s Strong Customer Loyalty
Costco may seem unexciting compared to Amazon, but it’s highly effective. Its loyal customer base appreciates its high-quality goods at low prices in a simple shopping setting, supported by a membership model that encourages repeat purchases.
This approach generates a consistent revenue stream, yielding $1.3 billion in the first quarter of fiscal year 2026. With a market cap of $379 billion and a stock price of $854.50, Costco has also seen a 241% increase in net income from fiscal 2015 to fiscal 2025.
Valuation and Growth Variations
Both Amazon and Costco are excellent businesses, known for their value to customers and steady growth. Amazon may be a better buy now largely due to its lower price-to-earnings (P/E) ratio of 32.6 compared to Costco’s 46.3.
Moreover, Amazon’s engagement with innovative technologies gives it a stronger potential for future growth compared to Costco’s stable yet predictable business model.
