One of the best mutual fund managers in history, Peter Lynch, believed in investing in what you know. Costco Wholesale (NASDAQ: COST) is a prime example of this strategy, resonating with consumers and delivering value through low merchandise margins. Despite a recent stock dip, Costco remains a solid long-term performer.

Costco and Amazon share similarities in customer loyalty and value offerings. Costco’s operating margin is 3.7%, while Amazon’s non-AWS business boasts a 4.1% operating margin. Amazon’s AWS business is a high-margin cash cow, making Amazon a better value proposition with more growth potential than Costco.

Amazon’s forward earnings multiple is lower than Costco’s, making Amazon a more attractive investment option with greater growth potential. The Motley Fool’s Stock Advisor team recommends 10 stocks for investors to consider, with Costco Wholesale not making the cut. Consider joining Stock Advisor for potential market-crushing returns.

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Read more at Nasdaq: 1 Stock I’d Buy Before Costco (COST) in 2026