Why Does Amazon Trade at a Discount to Walmart and Costco? Here's the Only Answer That Makes Sense.
Motley Fool·
- Amazon currently trades at roughly 20 times expected earnings, a significant discount compared to Walmart's 37 and Costco's 44 times projected earnings.
- This valuation gap is driven by investor caution over Amazon's massive capital expenditures of $220 billion primarily directed toward artificial intelligence infrastructure.
- While investors are paying premiums for Walmart and Costco as defensive holdings amid AI uncertainty, these high valuations may leave them vulnerable to market corrections.