Investment Comparison: Amazon vs. Costco
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy AMZN?
Source: Fool
- Amazon's Accelerating Growth: Amazon's Q4 net sales rose 14% year-over-year to $213.4 billion, with its cloud computing segment, AWS, seeing a 24% revenue increase, indicating strong market demand, although future capital expenditure plans may pressure free cash flow.
- Capital Expenditure Plans: Amazon expects to ramp up capital expenditures to $200 billion in 2026, significantly higher than the $131.8 billion spent in 2025, aiming to meet surging demand for AI and cloud services, despite potential short-term impacts on operating income.
- Costco's Stable Sales: Costco's net sales increased by 8.2% year-over-year to approximately $66 billion in Q1 FY2026, with membership fee revenue rising 14%, demonstrating business stability and customer loyalty, although it faces risks from high valuation.
- Market Valuation Discrepancies: Amazon trades at about 29 times earnings, which is considered attractive given its rapid growth in advertising and cloud revenue, while Costco's valuation at 54 times earnings reflects near-perfect execution expectations, leaving little room for error.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 207.920
Low
175.00
Averages
280.01
High
325.00
Current: 207.920
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
MrBeast's $5 Million Prize Sparks Controversy
- Prize Distribution Controversy: MrBeast awarded a $5 million prize in the second season of 'Beast Games', sparking intense debate online about the choice between a lump sum or $50,000 monthly, garnering 10.9 million views and highlighting public interest in financial decision-making.
- Poll Results Analysis: In a social media poll, 34.9% opted for the lump sum of $5 million, while 65.1% preferred the monthly income of $50,000 for life, reflecting a preference for long-term financial security despite both options equating in earnings after 8.33 years.
- Life Expectancy and Investment Returns: Given the average life expectancy of 78.4 years in the U.S., participants under 70 may find the monthly payment option more financially advantageous, especially if they can invest the lump sum for higher returns, potentially leading to greater financial gains.
- Social Response and Comparisons: MrBeast's question parallels the lottery jackpot dilemma, where a recent $1.8 billion jackpot offered a lump sum of only $826.4 million, illustrating that while lump sums seem appealing, the benefits of long-term payments include inflation adjustments, showcasing the complexity of financial choices people face.
See More
Amazon vs. Costco: A Financial Comparison
- Amazon Cloud Growth: Amazon's Q4 cloud computing revenue surged 24% year-over-year to $35.6 billion, indicating a strong acceleration in demand for AWS as optimization pressures ease, highlighting robust demand for AI infrastructure.
- Costco Membership Renewal: Despite raising membership fees in 2024, Costco maintained an impressive 92.2% renewal rate in the U.S. and Canada, showcasing strong customer loyalty and a stable revenue stream, with membership fee revenue increasing 14% to $1.33 billion.
- Amazon Investment Plans: Amazon plans to invest approximately $200 billion in capital expenditures in 2026, sharply up from $131.8 billion in 2025, which will pressure short-term free cash flow but underscores the company's confidence in future growth.
- Valuation Discrepancy: Amazon trades at about 29 times earnings compared to Costco's 54 times, reflecting the market's confidence in Costco's predictable business model, yet this high valuation leaves little room for error if consumer spending slows.
See More
Investment Comparison: Amazon vs. Costco
- Amazon's Accelerating Growth: Amazon's Q4 net sales rose 14% year-over-year to $213.4 billion, with its cloud computing segment, AWS, seeing a 24% revenue increase, indicating strong market demand, although future capital expenditure plans may pressure free cash flow.
- Capital Expenditure Plans: Amazon expects to ramp up capital expenditures to $200 billion in 2026, significantly higher than the $131.8 billion spent in 2025, aiming to meet surging demand for AI and cloud services, despite potential short-term impacts on operating income.
- Costco's Stable Sales: Costco's net sales increased by 8.2% year-over-year to approximately $66 billion in Q1 FY2026, with membership fee revenue rising 14%, demonstrating business stability and customer loyalty, although it faces risks from high valuation.
- Market Valuation Discrepancies: Amazon trades at about 29 times earnings, which is considered attractive given its rapid growth in advertising and cloud revenue, while Costco's valuation at 54 times earnings reflects near-perfect execution expectations, leaving little room for error.
See More
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- Asset Allocation Insight: This investment represents 10.45% of Cross Staff's 13F reportable AUM as of December 31, 2025, highlighting the significance of AKRE in its portfolio and potentially influencing its overall investment strategy and risk management.
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- Cloud Computing Leadership: Amazon's AWS division has attracted over 500 top startups in the U.S., indicating strong demand in the cloud computing market, which is expected to provide sustained growth momentum for the company in the future.
- Capital Expenditure Strategy: Amazon plans to allocate $200 billion in capital expenditures primarily to AWS to support AI-related workloads, demonstrating the company's confidence in the long-term profitability of this sector.
- E-commerce Innovation Expansion: Amazon has launched its discount retail Amazon Hall in over 25 countries and, by combining Whole Foods' physical stores with online shopping, has become the grocery choice for over 150 million people in the U.S., further solidifying its leadership in the e-commerce market.
- Prime Service Value Addition: Amazon's Prime service continues to enhance user experience by adding new features, including AI-driven chat capabilities and integrations with popular consumer products, which drives sales growth.
See More
Amazon's Future Growth Potential Analysis
- Cloud Services Expansion: Amazon's AWS has attracted numerous major companies to migrate their IT infrastructure, particularly through new agreements with well-known firms like OpenAI, showcasing its leadership in the cloud computing market and optimistic future prospects.
- AI Technology Investment: Amazon plans to allocate most of its $200 billion capital expenditures to AWS, especially in areas related to AI workloads, indicating the company's focus on AI technology and its potential profitability.
- E-commerce Business Innovation: Amazon has become the grocery choice for over 150 million people in the U.S. by combining Whole Foods with online shopping, continuously driving sales growth and enhancing market competitiveness.
- Prime Service Upgrades: Prime Video has attracted a large audience due to NFL and other live sports, while the newly launched Alexa Plus enhances user experience, demonstrating Amazon's ongoing efforts to increase customer value.
See More
MrBeast's $5 Million Prize Sparks Controversy
- Prize Distribution Controversy: MrBeast awarded a $5 million prize in the second season of 'Beast Games', sparking intense debate online about the choice between a lump sum or $50,000 monthly, garnering 10.9 million views and highlighting public interest in financial decision-making.
- Poll Results Analysis: In a social media poll, 34.9% opted for the lump sum of $5 million, while 65.1% preferred the monthly income of $50,000 for life, reflecting a preference for long-term financial security despite both options equating in earnings after 8.33 years.
- Life Expectancy and Investment Returns: Given the average life expectancy of 78.4 years in the U.S., participants under 70 may find the monthly payment option more financially advantageous, especially if they can invest the lump sum for higher returns, potentially leading to greater financial gains.
- Social Response and Comparisons: MrBeast's question parallels the lottery jackpot dilemma, where a recent $1.8 billion jackpot offered a lump sum of only $826.4 million, illustrating that while lump sums seem appealing, the benefits of long-term payments include inflation adjustments, showcasing the complexity of financial choices people face.
See More
Amazon vs. Costco: A Financial Comparison
- Amazon Cloud Growth: Amazon's Q4 cloud computing revenue surged 24% year-over-year to $35.6 billion, indicating a strong acceleration in demand for AWS as optimization pressures ease, highlighting robust demand for AI infrastructure.
- Costco Membership Renewal: Despite raising membership fees in 2024, Costco maintained an impressive 92.2% renewal rate in the U.S. and Canada, showcasing strong customer loyalty and a stable revenue stream, with membership fee revenue increasing 14% to $1.33 billion.
- Amazon Investment Plans: Amazon plans to invest approximately $200 billion in capital expenditures in 2026, sharply up from $131.8 billion in 2025, which will pressure short-term free cash flow but underscores the company's confidence in future growth.
- Valuation Discrepancy: Amazon trades at about 29 times earnings compared to Costco's 54 times, reflecting the market's confidence in Costco's predictable business model, yet this high valuation leaves little room for error if consumer spending slows.
See More
Investment Comparison: Amazon vs. Costco
- Amazon's Accelerating Growth: Amazon's Q4 net sales rose 14% year-over-year to $213.4 billion, with its cloud computing segment, AWS, seeing a 24% revenue increase, indicating strong market demand, although future capital expenditure plans may pressure free cash flow.
- Capital Expenditure Plans: Amazon expects to ramp up capital expenditures to $200 billion in 2026, significantly higher than the $131.8 billion spent in 2025, aiming to meet surging demand for AI and cloud services, despite potential short-term impacts on operating income.
- Costco's Stable Sales: Costco's net sales increased by 8.2% year-over-year to approximately $66 billion in Q1 FY2026, with membership fee revenue rising 14%, demonstrating business stability and customer loyalty, although it faces risks from high valuation.
- Market Valuation Discrepancies: Amazon trades at about 29 times earnings, which is considered attractive given its rapid growth in advertising and cloud revenue, while Costco's valuation at 54 times earnings reflects near-perfect execution expectations, leaving little room for error.
See More
Cross Staff Investments Acquires 289,630 Shares of AKRE Focus ETF
- New Investment Position: Cross Staff Investments Inc established a new position in the Professionally Managed Portfolios - Akre Focus ETF by purchasing 289,630 shares valued at $18.97 million as of February 27, 2026, indicating confidence in the fund's future performance.
- Asset Allocation Insight: This investment represents 10.45% of Cross Staff's 13F reportable AUM as of December 31, 2025, highlighting the significance of AKRE in its portfolio and potentially influencing its overall investment strategy and risk management.
- Market Performance Consideration: As of February 28, 2026, AKRE shares were priced at $56.14, reflecting a 20.61% decline over the past year and underperforming the S&P 500 by 37.97 percentage points, indicating a lack of market confidence in the ETF that may affect investor decisions.
- Investment Risk Advisory: While AKRE focuses on small- and mid-cap stocks with high growth potential, its concentrated investment strategy in a limited number of stocks also introduces higher volatility risks, necessitating careful evaluation of potential risks versus rewards by investors considering this ETF.
See More
Analysis of Amazon's Future Growth Potential
- Cloud Computing Leadership: Amazon's AWS division has attracted over 500 top startups in the U.S., indicating strong demand in the cloud computing market, which is expected to provide sustained growth momentum for the company in the future.
- Capital Expenditure Strategy: Amazon plans to allocate $200 billion in capital expenditures primarily to AWS to support AI-related workloads, demonstrating the company's confidence in the long-term profitability of this sector.
- E-commerce Innovation Expansion: Amazon has launched its discount retail Amazon Hall in over 25 countries and, by combining Whole Foods' physical stores with online shopping, has become the grocery choice for over 150 million people in the U.S., further solidifying its leadership in the e-commerce market.
- Prime Service Value Addition: Amazon's Prime service continues to enhance user experience by adding new features, including AI-driven chat capabilities and integrations with popular consumer products, which drives sales growth.
See More
Amazon's Future Growth Potential Analysis
- Cloud Services Expansion: Amazon's AWS has attracted numerous major companies to migrate their IT infrastructure, particularly through new agreements with well-known firms like OpenAI, showcasing its leadership in the cloud computing market and optimistic future prospects.
- AI Technology Investment: Amazon plans to allocate most of its $200 billion capital expenditures to AWS, especially in areas related to AI workloads, indicating the company's focus on AI technology and its potential profitability.
- E-commerce Business Innovation: Amazon has become the grocery choice for over 150 million people in the U.S. by combining Whole Foods with online shopping, continuously driving sales growth and enhancing market competitiveness.
- Prime Service Upgrades: Prime Video has attracted a large audience due to NFL and other live sports, while the newly launched Alexa Plus enhances user experience, demonstrating Amazon's ongoing efforts to increase customer value.
See More
