Amazon and Costco Set as Promising Investments Before 2026 Christmas Season

Amazon and Costco are regarded as promising investments before the 2026 Christmas season. Thanksgiving falls on 26 November, with Black Friday on 27 November, making the year's most important shopping period imminent.

Adobe expects record revenue of $275 billion in online retail for the last two months of 2026 – an increase of 6.7 percent compared to the previous year. Consumers are expected to spend $95.8 billion in October alone, as many shoppers make their Christmas purchases earlier than in previous years. However, the retail sector as a whole is lagging behind the broader market this year.

Amazon benefits from the fourth quarter

The fourth quarter is traditionally the strongest revenue period for Amazon. During the 2025 Christmas period, the company achieved net revenue of $213.4 billion – 14 percent higher than the previous year and significantly above the $180.2 billion of the third quarter. Fourth quarter 2025 revenue was thus around 18.4 percent higher than the third quarter.

Operating income in the North America segment, which comprises the majority of the retail business, increased year-over-year by around 24 percent to $11.5 billion in the fourth quarter 2025 – far above the $7.3 billion of the third quarter. This year, Amazon's revenue is growing even faster than in 2025.

Amazon's stock is currently trading around 11 percent below its record high from 3 August. Amazon is positioned through its October Prime event to benefit from early Christmas shopping, which has changed the traditional shopping calendar.

Costco with strong growth in September

Costco's comparable sales excluding petrol prices and currency effects increased by 7.6 percent in September – faster than in the previous year's Christmas quarter. For fiscal year 2026, Costco generated earnings per share of $20.76. In mid-October, the stock was trading at around $986 to $1,000.

At a price of around $986, investors are paying 47.5 times annual earnings. The Costco stock gained around 8 percent in October thus far. Both companies are entering the season with revenue growth that has remained stable this year.

Other strong retailers heading into the season

Target, Abercrombie & Fitch, Ulta Beauty and Victoria's Secret have outperformed competitors in retail with strong quarterly results ahead of the Christmas season. The peak of business extends from 27 November to 1 December. For the largest retailers, the weeks after Thanksgiving can contribute more to annual results than any other period.

Singles' Day on 11 November marks another important date on the shopping calendar. Forecasts from Deloitte and Adobe point to a positive season.