Morgan Stanley Reiterates Buy Rating on Costco (COST), Sets $1,225 PT

On May 30, Morgan Stanley analyst Simeon Gutman reiterated a Buy rating on Costco Wholesale Corporation (NASDAQ:COST) and set a price target of $1,225.00. The analyst based the rating update on COST’s strong growth potential and performance following the release of its fiscal Q3 2025 and YTD results on May 29.

Jim Cramer Says “Costco (COST) is Actually on Fire”

A customer in a warehouse aisles, browsing the wide range of branded and private-label products.

Costco Wholesale Corporation (NASDAQ:COST) reported an 8% growth in its net sales for the quarter, reaching $61.96 billion compared to $57.39 billion last year. The analyst highlighted the company’s strong member growth and comparable sales momentum. Its membership fee income reached $1.24 billion, reflecting a growth of $117 million or 10.4% year-over-year.

The company also achieved better-than-expected gross margins, increasing by 41 basis points year-over-year to 11.25%, compared to 10.84% last year. The analyst attributed this growth to efficiency improvements, especially in the fresh department.

Another reason supporting the Buy rating is Costco Wholesale Corporation’s (NASDAQ:COST) ability to expand its market share against competitors and leverage its scale to counteract inflationary pressures. The analyst reasoned that its business model focuses on consumable categories, which offers a defensive edge due to limited tariff risks.

Gutman also stated that Costco Wholesale Corporation (NASDAQ:COST) is continuing eCommerce expansion and productivity improvements, initiatives that he anticipates will continue driving margin gains and support an optimistic long-term growth outlook for the stock.

Costco Wholesale Corporation (NASDAQ:COST) operates membership-only big box warehouse club stores and is one of the most popular department stores in the US. It offers its customers a wide range of offerings, including food, beverages, groceries, and more.

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Disclosure: None.