Can Costco Stock Hit $1,200? Or Is That a Pipe Dream?

Shares of Costco (NASDAQ:COST) have been picking up momentum so far this year, now up close to 14% year to date. With the big-box retail giant now flirting with the $1,000 per-share mark again, investors might wonder what the next move is for the firm that the late, great Charlie Munger used to love. Undoubtedly, Costco came into 2026 in a bit of an oversold position. So, it shouldn’t come as too big a surprise to see the new year act as a fresh slate for the firm.

With a big quarterly earnings beat posted last week, it feels like Costco has what it takes to make a run for its prior highs again. Notably, e-commerce was a strong point for Costco in its latest quarter. As the retailer doubles down on its digital strengths, perhaps there’s runway for further growth, even if memberships do hit a bit of a roadblock at some point. In any case, the main drivers for Costco lie in the international expansion as well as e-commerce, two areas that could open the floodgates for a new wave of members.

Undoubtedly, many younger consumers just love the convenience of having things delivered. And while such consumers are still going into physical Costco locations, I do think there’s an opportunity to increase digital basket sizes as well as membership fees as Costco looks to make up for lost time on e-commerce. Additionally, there’s a massive opportunity to go after that younger consumer who would have never signed up for a Costco membership had it stuck primarily with physical stores.

Costco’s Digital Push May Just Be Getting Started

Of course, the warehouse treasure hunt experience offered by Costco is best when going into one of its physical stores. However, I think there’s no reason why Costco can’t be a force online as well, especially as agentic commerce looks to pave a new pathway for growth.

Whether you’re more interested in picking up a few shares of Costco to play defence or if you’re bullish about the company’s stealthy digital move, I think there’s more than one way to nudge the stock back on track to $1,200 per share. Perhaps the rise of agentic and physical AI represents the perfect time to go heavy on digital efforts.

Once the tech matures, members of the future (perhaps even the near-future) might be able to get their agents to take care of the weekly grocery hauls for them. And the Costco haul will magically appear on one’s doorstep, perhaps using the power of drone delivery or autonomous driving.

I think the latest digital surge might be just a hint of what to expect as Costco catches up, just in time for the AI agent era. Some analysts, like those at Morgan Stanley, think that the latest 34.4% rise in digital sales is a “digital inflection” point. I’m inclined to agree. Add the international growth prospects into the equation, and $1,200 per share seems less like a bull case and more like a base, or even a conservative base, case, especially when you consider management’s knack for execution.

The Premium Price Is Worth Paying

The stock trades at just north of 53.0 times trailing price-to-earnings (P/E), which feels high for a company that’s growing sales by the single digits. In any case, the $431 billion juggernaut has a ton of room to scale up, especially beyond the U.S. market. And such a high growth ceiling, I think, makes it possess everything it takes to become a $1 trillion company.

Costco seems primed to dominate in digital, all while it takes shares in physical, as it opens new stores, opening a new window of opportunity for nearby locals to sign up for a membership.

With such great growth levers and arguably one of the best managers around, I think the year-to-date gain in the stock is worth chasing, even if the current price of admission might leave some value investors a bit uneasy.