The holiday shopping season represents one of the most critical stretches of the year for major retailers, capable of making or breaking annual results.
For Amazon (NASDAQ: AMZN), the fourth quarter is reliably its strongest period, driven by a surge in consumer spending that dwarfs every other quarter.
During the holiday period of 2025, Amazon reported net sales of $213.4 billion, a 14% increase year over year and well above the third quarter’s $180.2 billion.
That pattern has proven consistent, with last year’s fourth-quarter sales coming in around 18% higher than third-quarter sales, underlining just how significant the season is for the company.
Amazon shares are currently trading below the record high they reached in early August, presenting what some analysts view as an attractive entry point before the holiday rush.
Costco Wholesale (NASDAQ: COST) is the second retail stock drawing attention, with shares rising around 8% so far in October to approach the $1,000 mark.
Unlike Amazon, Costco’s fiscal calendar means Black Friday and December fall within its fiscal second quarter, making its monthly sales reports one of the earliest public signals of how the holiday season is progressing.
Costco noted that a later Labor Day added just a bit more than half a percentage point to September’s comparable sales, suggesting underlying momentum heading into the holidays.
With 89.8% of members worldwide renewing their memberships, Costco benefits from a predictable revenue stream that can help cushion the company against any softness in seasonal spending.
Membership fees reached approximately $5.9 billion for fiscal 2026, accounting for roughly half of the company’s operating income, with that fee income booked evenly across each member’s year.
This structure means Costco’s profits are somewhat insulated from holiday volatility, giving it a stability that purely merchandise-driven retailers cannot always match.
On the investment case, Amazon’s stock currently trades at a lower price than it did in August, which the article’s author argues makes it the more compelling buy of the two at current levels.
One notable headwind for Amazon is that heavy capital spending tied to artificial intelligence drove free cash flow to an outflow of around $7.6 billion in the most recently reported period.
Despite that outflow, Amazon’s scale, its dominant position in e-commerce, and its reliable seasonal surge make it a stock worth considering before the holiday season gets fully underway.
Both companies enter this critical retail period with sales growth that has held up well throughout the year, setting the stage for what could be a strong finish to 2026.
