Finance
Costco Stock Dwarfs Gains by Amazon and Tesla
Although it doesn’t deserve the name Magnificent Seven, Costco Wholesale (COSTS) has surpassed all but one of these tech titans this year Nvidia (NVDA) And Metaplatforms (META). Additionally, Costco stock’s performance has more than doubled Amazon.com (AMZN) And Tesla (TSLA) – and tripled that of Microsoft (MSFT) — since January. Now the big box retailer is expanding that lead with a new breakthrough.
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Costco beats Amazon, Tesla and Microsoft this year
With Nvidia reporting after the close on Wednesday, Wall Street is eagerly awaiting what one analyst called the “most important tech earnings in years.” Nvidia stock has already been the best performer among the Magnificent Seven stocks this year, with a 152% gain as of Tuesday’s close.
Meta Platforms is next, up 46% this year.
But then comes non-Magnificent Seven company Costco, which has posted a 35% gain this year as of Monday’s close. The chain store is not only at the top of the list of Alphabet, Apple, Tesla, Amazon and Microsoft. It more than doubles them all. In fact, Costco has more than tripled that 10% gain for Microsoft stock, while Tesla actually has down 14% for the year.
And to make matters worse, with Amazon, Tesla, and Microsoft still stuck below their 50-day moving averages, Costco just joined the IBD Breakout Stocks Index as it launches a move to new highs.
| Company | Symbol | % profit YTD* | Comp rating | EPS rating | RS rating | SMR assessment |
|---|---|---|---|---|---|---|
| Nvidia | NVDA | 155% | 97 | 99 | 98 | A |
| Metaplatforms | META | 47 | 93 | 97 | 91 | A |
| Costco Wholesale | COSTS | 35 | 90 | 89 | 91 | b |
| Alphabet | GOOGL | 19 | 78 | 98 | 70 | A |
| Apple | AAPL | 18 | 90 | 86 | 85 | A |
| Amazon.com | AMZN | 16 | 77 | 82 | 61 | A |
| Microsoft | MSFT | 10 | 61 | 93 | 51 | A |
| Tesla | TSLA | -14 | 55 | 57 | 48 | b |
*From August 26, 2024
See who joins Costco on the IBD Breakout Stocks Index
Costco stock shops for a breakout – and finds one
With the relative strength line already hitting a 52-week high, Costco shares moved into buy range on Monday. The retail giant achieved a buy point of 896.67 early in the cup pattern and remains within buy range.
While never a high-flying, flashy growth stock along the lines of Nvidia, Meta, or Tesla, Costco has a long track record of delivering solid and steady growth. Boosted by reliable and recurring membership fees, the retailer has achieved sales growth of 2% to 15% over the past eight quarters.
In its last quarterly report on May 30, Costco generated $58.5 billion in revenue, marking a 9% annualized gain.
Bottom-line growth has ranged from 4% to 18% over the past eight quarters. In the May report, Costco posted a 10% increase in earnings to $3.78 per share for the quarter.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF (HISTORY) from Innovator Capital Management tracks the IBD Breakout Stocks Index. Like other index ETFs, this fund allows you to invest in the entire index in addition to or instead of buying individual stocks. Read more here about the ETF and Innovator.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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