Core Insights - The article highlights the significant impact of artificial intelligence (AI) on the stock market and the economy, with companies like Nvidia seeing stock increases of 809% over the past three years [1] - It emphasizes that not only tech companies but also traditional retailers like Costco have shown impressive stock performance, with Costco's stock up 232% over the past five years [2] Company Overview - Costco has established itself as the leading warehouse club operator, differentiating itself from giants like Amazon and Walmart [4] - The company operates on a membership-based model, boasting 79.6 million memberships as of May 11, reflecting a year-over-year increase of 6.8% [5] Financial Performance - In the latest fiscal quarter, Costco reported $62 billion in merchandise sales, positioning it among the largest retailers globally [6] - Costco's same-store sales increased by 5.7% in the latest fiscal quarter, following increases of 5.3% in fiscal 2024 and 3% in fiscal 2023, indicating consistent growth [9] Cost Structure and Economic Moat - The company benefits from significant buying power, allowing it to acquire merchandise at favorable costs, with selling, general, and administrative expenses at just 9% of total revenue, compared to Walmart's nearly 21% [7] - Costco's business model, primarily reliant on membership fees, enables it to maintain low merchandise prices, creating a positive feedback loop that supports its economic moat [7] Dividend Policy - Costco pays a quarterly dividend of $1.30 per share, yielding 0.5% at the current share price, and has a history of issuing special dividends, including a recent $15 per share distribution in January 2024 [10] Investor Sentiment - The company has consistently outperformed the S&P 500 index over various time frames, showcasing its strong investment appeal [11] - Despite its strong performance, Costco's price-to-earnings ratio has reached 56.8, suggesting that investors may want to wait before purchasing the stock [13]