Retail Investors on Reddit Like Costco Wholesale (COST), Here’s Why

COST -1.43%

We recently published Top 10 Non-AI Stocks Redditors are Buying Ahead of Potential Bubble Burst. Costco Wholesale Corp (NASDAQ:COST) is one of the top non-AI stocks redditors are buying.

Redditors believe Costco Wholesale Corp (NASDAQ:COST) remains one of the best non-AI stocks for long-term investors. Evercore ISI analyst Greg Melich said in a note last month that extended operating hours and selling GLP-1 drugs at its stores are expected to boost traffic for Costco Wholesale Corp (NASDAQ:COST). The analyst also thinks the company is positioned well for market share gains amid elevated inflation as Americans hunt for value.

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However, COST shares have been underperforming amid growth and valuation concerns recently. With revenue growth of just 6% and earnings growth of about 10% over the past three years, COST’s P/E of 51 seems elevated, according to many analysts. To boost growth, Costco has an option to expand to low-profit areas, which could pressure its margins.

While we acknowledge the potential of COST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.