Costco Wholesale Corporation (COST): A Bull Case Theory

We came across a bullish thesis on Costco Wholesale Corporation on Wonder Stocks’s Substack by Wonder Stocks. In this article, we will summarize the bulls’ thesis on COST. Costco Wholesale Corporation's share was trading at $913.59 as of November 28th. COST’s trailing and forward P/E were 50.17 and 45.25 respectively according to Yahoo Finance.

Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States and internationally. Some businesses achieve durable advantage through technology, network effects, or branding, but Costco stands out as a company that has built a structural moat through relentless cost leadership. Its culture of efficiency is not a tactic but a long-term philosophy that shapes every operational decision.

By consistently prioritizing value for customers, fair pay and stability for employees, and long-term partnerships with suppliers, Costco has created a flywheel that reinforces its competitive position year after year. This discipline allows the company to keep prices low without compromising quality, deepening customer trust and driving extraordinary loyalty, which in turn strengthens scale advantages and operational leverage. Over decades, what began as a simple commitment to efficiency has compounded into a powerful ecosystem that competitors struggle to replicate.

For investors, this cultural foundation translates into a compelling bullish case. Costco’s ability to sustain industry-leading renewal rates, expand its member base, and maintain high returns on invested capital stems directly from its cost-driven model. Even when the stock appears expensive on traditional metrics, the underlying durability of its moat and the predictability of its cash flows justify a long-term premium.

Companies like Wise or Mercado Libre show how compounding advantages develop over time, but Costco represents the mature, proven version of that journey—a business where scale, trust, and discipline have already converged into an enduring fortress. While uncertainty often creates opportunity, Costco demonstrates that some moats built patiently over decades can still offer meaningful upside. Its culture remains its greatest asset, and for long-term investors, that remains a powerful reason to stay bullish.

Previously we covered a bullish thesis on Costco Wholesale Corporation by FluentInQuality in March 2025, which highlighted its membership-driven model, cost leadership, and financial compounding. The company’s stock price has depreciated approximately by 12.72% since our coverage. This is because the thesis didn’t play out in the short term. The thesis still stands as Costco’s structural advantages remain intact. Wonder Stocks shares a similar view but emphasizes its culture-driven moat.

Costco Wholesale Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 91 hedge fund portfolios held COST at the end of the second quarter which was 93 in the previous quarter. While we acknowledge the potential of COST as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.