Amazon vs Costco

Amazon and Costco are examined in this page to compare their business models, financial performance, and market context. The analysis presents neutral, accessible information on how each company operates, how earnings and cost structures influence strategy, and how competitive environments shape their positions. Educational content, not financial advice.

Amazon and Costco are examined in this page to compare their business models, financial performance, and market context. The analysis presents neutral, accessible information on how each company opera...

Comparison Snapshot

Key Financial Metrics

AMZN

Metric

COST

$2.55T

Market Cap

$433.96B

18.21%

Potential Profit

4.35%

Buy

Analyst Rating

Buy

Why It's Moving

Analysts Boost Amazon Price Targets, Eyeing Explosive Breakout in 2026

AWS growth accelerated to 20% in the latest quarter from prior declines to 17%, with operating margins jumping to 34.6%, signaling robust cloud and AI momentum.
Wedbush highlights breakout potential from automation, new AI-powered Alexa features, and Project Kuiper monetization kicking off soon.
Potential Prime subscription price hike in 2026, paired with strong retail and advertising trends, positions Amazon for outsized gains.

Sentiment:

🐃Bullish

Costco Shares Surge to 19-Week High on Robust Q1 Earnings and Analyst Upgrades

Q1 comparable sales hit 6.4% (7.1% excluding gas), driven by broad-based strength in non-foods, foods, and fresh categories, plus 20.5% digitally enabled growth.
Mizuho upgraded to Outperform with $1,000 target, spotlighting accelerating trade-up to premium memberships at 2-3x total adds and adding COST to Top Picks.
Deutsche Bank initiated Buy at $1,044, citing tailwinds like 2026 stimulus despite food disinflation and value-focused spending.

Sentiment:

🐃Bullish

Analysts Boost Amazon Price Targets, Eyeing Explosive Breakout in 2026

AWS growth accelerated to 20% in the latest quarter from prior declines to 17%, with operating margins jumping to 34.6%, signaling robust cloud and AI momentum.
Wedbush highlights breakout potential from automation, new AI-powered Alexa features, and Project Kuiper monetization kicking off soon.
Potential Prime subscription price hike in 2026, paired with strong retail and advertising trends, positions Amazon for outsized gains.

Sentiment:

🐃Bullish

Costco Shares Surge to 19-Week High on Robust Q1 Earnings and Analyst Upgrades

Q1 comparable sales hit 6.4% (7.1% excluding gas), driven by broad-based strength in non-foods, foods, and fresh categories, plus 20.5% digitally enabled growth.
Mizuho upgraded to Outperform with $1,000 target, spotlighting accelerating trade-up to premium memberships at 2-3x total adds and adding COST to Top Picks.
Deutsche Bank initiated Buy at $1,044, citing tailwinds like 2026 stimulus despite food disinflation and value-focused spending.

Sentiment:

🐃Bullish

Investment Analysis

Amazon

AMZN

Pros

Amazon's e-commerce platform is supported by a highly efficient logistics network, enabling consistently low prices and strong customer retention.
Amazon Web Services remains a dominant cloud provider, generating substantial and growing operating income for the company.
Amazon's stock is currently trading below its estimated intrinsic value according to discounted cash flow models, suggesting potential upside.

Considerations

Amazon faces intense competition in both e-commerce and cloud services, which could pressure margins and growth rates.
The company's profitability is sensitive to macroeconomic conditions and consumer spending trends, making it somewhat cyclical.
Amazon's valuation, while below intrinsic value, is still elevated compared to some peers, increasing downside risk if growth slows.

Costco

COST

Pros

Costco's membership model delivers high customer retention and recurring revenue, contributing to stable earnings growth.
Recent membership fee increases are expected to boost earnings, with most of the benefit materialising in 2025 and 2026.
Costco maintains a strong balance sheet and consistent cash flow, supporting its ability to invest and return capital to shareholders.

Considerations

Costco's stock is trading at a premium forward price-to-earnings ratio, indicating it may be overvalued relative to fundamentals.
The company's growth is largely dependent on physical store expansion, which can be capital-intensive and slower than digital models.
Costco's business is exposed to inflation and supply chain disruptions, which could affect margins and operational efficiency.

Related Market Insights

When Big Pharma Stumbles, Innovation Thrives: The Sickle Cell Opportunity

Explore the investment opportunity in sickle cell gene therapy. Pfizer's setback opens doors for innovative biotech firms developing next-gen treatments for this inherited disorder.