In the stock market, it is often seen that demand for a stock increases after a rally and drops following a period of underperformance. Some stocks, like Amazon and Costco Wholesale, are rallying for excellent reasons despite already having outperformed the market in the past year. Amazon, known for its exposure to enterprise cloud services growth alongside a profitable e-commerce segment, continues to show strong sales and earnings growth. Despite its recent upsurge, the stock is still considered undervalued and could be a good long-term investment option.
Similarly, Costco Wholesale, a retailer that has been performing like a tech stock, is also experiencing a significant rally. The company’s innovative price-leadership strategy has attracted more customers to its stores, leading to a healthy increase in customer traffic and online sales. Even though Costco’s short-term sales and earnings gains may not be as high as some competitors, its stable profit margins and high customer engagement make it a valuable consumer staples stock worth considering even after its recent rally. Investors should pay attention to Costco’s long-term success potential and the financial benefits it can derive from strategies like membership fee hikes.
Both Amazon and Costco seem poised for sustained growth and investors should not be deterred by their recent rallies. Despite market oddities where popularity increases as prices rise, these stocks offer strong operating momentum and potential for future gains. Keeping them in a long-term investment portfolio could prove to be beneficial, especially considering their strong fundamentals and positive growth outlooks.
