Seven of Nine Top AI Stocks Have Lower P/E Ratios Than Costco and Walmart
Costco cost about twice as much as Nvidia for each dollar of yearly profit at Thursday's close, $51 against $26 for each $1 once one-time gains are left out, though Nvidia's sales more than doubled and Costco's grew 11%. Seven of nine top AI stocks, Nvidia among them, were priced lower per dollar of profit than Costco and Walmart.
The short answer. Investors paid about twice as much for each dollar of Costco's yearly profit as for Nvidia's, and only AMD and Palantir, of nine top AI stocks, cost more than Costco and Walmart. The market likely pays more for profit it expects to last than for profit that is growing fast, which says how sure investors are about the AI boom. Here, 21 companies are compared with one-time gains taken out, along with how far Micron's and Nvidia's profit could fall before they cost as much as Coca-Cola or Costco.
AI stocks against everyday stocks, at the November 5, 2026 close
Show the data
| Category | Micron (fiscal years to September) | Coca-Cola (2026: 4 quarters to Oct 2) |
|---|---|---|
| 2018 | $11.51 | $1.50 |
| 2019 | $5.51 | $2.07 |
| 2020 | $2.37 | $1.79 |
| 2021 | $5.14 | $2.25 |
| 2022 | $7.75 | $2.19 |
| 2023 | -$5.34 | $2.47 |
| 2024 | $0.70 | $2.46 |
| 2025 | $7.59 | $3.04 |
| 2026 | $74.33 | $3.40 |
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AI stocks P/E compared with Costco, Walmart and Coca-Cola
A P/E tells you how many years of today's profit you pay for when you buy a share. At Thursday's close, Costco cost 51 years of its profit. Micron, the AI memory chip maker, cost about 9.
The P/E, short for price to earnings, divides a share's price by the profit per share the company made over its last four quarters. A P/E of 20 means a buyer pays $20 for each $1 of yearly profit. It measures one thing: what the market pays today for profit already earned.
The nine AI stocks are the four biggest spenders on data centers and other equipment in their latest quarter (Amazon, Alphabet, Microsoft and Meta). Then come the four most valuable US chipmakers at Thursday's close (Nvidia, Broadcom, Micron and AMD), and Palantir, which sells AI software.
The 12 everyday companies are big household names: the stores, restaurants, snacks, drinks, soap and trash pickup most Americans pay for.
Side by side, the two big store chains stand out. Nvidia, Broadcom, Micron, Microsoft, Alphabet, Meta and Amazon all cost less per dollar of profit than Costco and Walmart. Waste Management, which collects household trash, cost 30.5 times its profit. Chipotle, the burrito chain, cost 33. Both were above Nvidia.
As whole groups, the picture flips. Without one-time items, the middle AI stock in the table, Microsoft, cost 30.3 times its profit, more than the middle everyday company at about 25. Costco and Walmart are the two most expensive of the 12 everyday names.
One of the widest gaps is between Micron and Coca-Cola. Micron's sales grew 379% in its latest quarter, and its stock cost 8.8 times profit. Coca-Cola's sales grew 7.4%, and its stock cost 28.8 times.
Prices moved again on Friday. After the drop that pulled the whole market down on Thursday, Nvidia traded about 3.7% higher before the open at 7:13 a.m. ET, according to StockTitan real-time Nasdaq data. That puts its P/E near 27, still about half of Costco's.
| Company | Latest quarter ended | Sales growth, latest quarter | P/E as filed | P/E without one-time items | What was taken out |
|---|---|---|---|---|---|
| Nvidia (NVDA) | Jul 26, 2026 | 106% | 23.0 | 26.3 | Gains on its stakes in other companies, after a 21% tax |
| AMD | Sep 26, 2026 | 45% | 87.9 | 76.9 | A $0.66 a share charge on rights to buy its shares that it gave customers |
| Broadcom (AVGO) | Aug 2, 2026 | 86% | 37.2 | 37.2 | Nothing of size |
| Micron (MU) | Sep 3, 2026 | 379% | 8.8 | 8.8 | Nothing of size |
| Microsoft (MSFT) | Sep 30, 2026 | 19% | 28.0 | 30.3 | Its OpenAI gains, using Microsoft's own figures, and the $3.2 billion Anthropic gain its June quarter release names, after a 21% tax |
| Alphabet (GOOGL) | Sep 30, 2026 | 25% | 14.7 | 26.0 | Gains on its stakes in other companies, after a 21% tax |
| Meta | Sep 30, 2026 | 26% | 20.6 | 20.3 | A $9.89 billion legal charge and an $8.03 billion tax benefit, using Meta's own per share amounts |
| Amazon (AMZN) | Sep 30, 2026 | 12% | 21.0 | 35.4 | Other income, mostly from its Anthropic stake, after a 21% tax |
| Palantir (PLTR) | Sep 30, 2026 | 96% | 108.4 | 108.4 | Nothing of size |
| Costco (COST) | Aug 30, 2026 | 11.1% | 51.3 | 51.3 | Nothing of size |
| Walmart (WMT) | Jul 31, 2026 | 5.9% | 46.1 | 45.1 | Walmart's own adjusted figure |
| Chipotle (CMG) | Sep 30, 2026 | 9.6% | 33.1 | 33.1 | Nothing of size |
| Waste Management (WM) | Sep 30, 2026 | 6.3% | 31.7 | 30.5 | WM's own adjusted figure |
| Coca-Cola (KO) | Oct 2, 2026 | 7.4% | 28.2 | 28.8 | Coca-Cola's own comparable figure |
| Colgate-Palmolive (CL) | Sep 30, 2026 | 4.6% | 38.7 | 25.4 | Colgate's own base business figure, without a skin care writedown |
| Home Depot (HD) | Aug 2, 2026 | 5.7% | 24.5 | 24.5 | Nothing of size |
| Procter & Gamble (PG) | Sep 30, 2026 | 4.0% | 25.2 | 24.2 | P&G's own core figure |
| AutoZone (AZO) | Aug 29, 2026 | 5.6% | 21.7 | 21.7 | Nothing of size |
| McDonald's (MCD) | Sep 30, 2026 | 1.1% | 22.0 | 21.6 | McDonald's own figure without restructuring charges |
| Hershey (HSY) | Sep 27, 2026 | 3.0% | 20.1 | 20.6 | Hershey's own adjusted figure |
| PepsiCo (PEP) | Sep 5, 2026 | 5.6% | 17.9 | 17.9 | None used |
Source: each company's Form 10-Q and 10-K filings and results releases for its last four reported quarters (latest quarters ended July 26 to October 2, 2026); official closes of November 5, 2026 from StockTitan data. Sales growth compares the latest quarter with the same quarter a year earlier. P/E as filed uses each company's reported profit per share.
How fast are AI stocks growing?
Faster than any of the everyday companies. The slowest of the nine AI companies, Amazon, still grew sales a little faster than Costco.
Show the data
| Category | Value |
|---|---|
| Micron (to Sep 3) | 379.3% |
| Nvidia (to Jul 26) | 105.9% |
| Palantir (to Sep 30) | 95.9% |
| Broadcom (to Aug 2) | 85.5% |
| AMD (to Sep 26) | 44.7% |
| Meta (to Sep 30) | 26.1% |
| Alphabet (to Sep 30) | 24.7% |
| Microsoft (to Sep 30) | 18.8% |
| Amazon (to Sep 30) | 12.1% |
Show the data
| Category | Value |
|---|---|
| Costco (to Aug 30) | 11.1% |
| Chipotle (to Sep 30) | 9.6% |
| Coca-Cola (to Oct 2) | 7.4% |
| Waste Management (to Sep 30) | 6.3% |
| Walmart (to Jul 31) | 5.9% |
| Home Depot (to Aug 2) | 5.7% |
| PepsiCo (to Sep 5) | 5.6% |
| AutoZone (to Aug 29) | 5.6% |
| Colgate-Palmolive (to Sep 30) | 4.6% |
| Procter & Gamble (to Sep 30) | 4.0% |
| Hershey (to Sep 27) | 3.0% |
| McDonald's (to Sep 30) | 1.1% |
Every AI company on the list grew sales faster than every everyday one. Nvidia's sales were $96.2 billion in the quarter to July 26, up 106% from a year earlier, as its results release shows. McDonald's revenue rose 1% in its latest quarter.
The two chipmakers also forecast more. Nvidia expects $108 billion of sales for the quarter that ended in October. Micron expects about $61.5 billion for the quarter to late November, up from $54.2 billion in its last report.
Why is Costco's P/E so high?
A likely reason is that its profit has climbed steadily for years. Costco's profit per share rose in each of its last ten business years, which end around September 1, and its members pay a fee before they buy anything.
A P/E of 51 means paying for 51 years of today's profit. Costco's long record of rising profit is one likely explanation. Its profit per share went from $5.33 in its business year 2016 to $20.76 in 2026, higher every year, its annual reports show.
Part of that profit comes before a shopper fills a cart. Costco collected $5.9 billion in membership fees in its fiscal year to August 30, up from $5.3 billion, its results release shows.
Coca-Cola shows a similar pattern in the chart near the top of this page. Its profit per share stayed between $1.50 and $3.40 in every year since 2018. People keep buying groceries and drinks in good times and bad, and Walmart says about 280 million customers and members visit its stores and websites each week.
Steady companies are priced high across the market. FactSet reported on October 30 that consumer staples, the sector of soda, soap and groceries, had one of the three highest P/Es on expected profit among the eleven sectors of the S&P 500, the index of 500 big US companies. Information technology was not among the three.
Why Nvidia's P/E is lower than Costco's
Nvidia's sales depend on a few huge buyers. And three of the four biggest AI spenders now spend more on buildings and equipment than their businesses bring in as cash.
Nvidia's own filing shows how few buyers carry its sales. Three direct customers made up 44% of Nvidia's sales in the six months to July 26, according to its quarterly report. Nvidia does not name them.
Show the data
| Part | Value | Squares |
|---|---|---|
| Three biggest direct customers | 44% | 44 |
| Everyone else | 56% | 56 |
The biggest spenders are pouring money into data centers. From July to September, Amazon spent $77.3 billion on buildings and equipment, while its business brought in $42.4 billion of cash, its quarterly report shows. Alphabet and Meta also spent more than they took in. Microsoft spent less.
Show the data
| Item | Cash from the business | Spent on equipment | Change |
|---|---|---|---|
| Amazon | $42.4B | $77.3B | +$34.9B |
| Alphabet | $42.3B | $51.4B | +$9.1B |
| Meta | $32.8B | $33.9B | +$1.1B |
| Microsoft | $58.0B | $39.4B | -$18.6B |
That spending serves cloud businesses that are growing fast. Amazon's AWS sales rose 39% and Google Cloud's rose 103% in that quarter, their releases show.
Spending above cash for long takes savings, borrowing or cuts elsewhere. A likely reason the market pays less for each dollar of AI chip profit is that it could shrink fast if a few buyers slow down. Walmart's and Costco's profit comes from millions of shoppers.
Why is Micron's P/E so low?
Memory chip profit rises and falls with memory prices. Micron's profit vanished before, in its business year to September 2023, which is a likely reason investors pay little for this year's record.
Micron earned $74.33 a share in the fiscal year to September 3, against $7.59 the year before, its results release shows. Memory chips sell at prices set by supply and demand, and those prices swing. Rival SK hynix showed the same kind of boom in its own results.
The chart near the top shows the swing. In its business year to September 2022, Micron earned $7.75 a share. A year later it lost $5.34 a share, as memory prices fell. Profit at the top of a swing like that is likely worth less to a buyer than the same profit from a company that rarely swings.
The arithmetic shows how big the gap is. If both share prices stayed where they closed on Thursday, Micron's yearly profit could fall by 69% and its stock would still cost no more per dollar of profit than Coca-Cola's. The P/E alone does not say how far Micron's profit will move, or when.
How one-time gains change Alphabet, Amazon and Meta's P/E
Big gains on shares they hold in other companies made Alphabet and Amazon look far cheaper than their businesses are. Without those gains, both cost much more per dollar of profit.
The profit a company reports includes gains on shares it owns in other companies. In the past year these were huge. Alphabet's quarterly reports show $129.6 billion of gains on stocks it holds over four quarters. That is why its P/E as filed was only 14.7. Without those gains it is 26.0, about the same as Nvidia.
Amazon booked $53.4 billion of income outside its business in the second quarter alone, mostly from its investment in Anthropic, according to its second quarter release. Without that kind of income over four quarters, Amazon's P/E rises from 21.0 to 35.4.
Nvidia also booked gains on its stakes in other companies. Taking them out raises its P/E from 23.0 to 26.3.
Meta's two big one-time items nearly cancel out. A $9.89 billion charge for a settlement with state attorneys general lowered its profit. An $8.03 billion tax benefit earlier in the year raised it. Its P/E is about 20 either way.
Microsoft's gains from OpenAI matter less. Each quarter, Microsoft also publishes its profit without them, as in its December, March, June and September quarter releases. Its June quarter release also names a $3.2 billion gain from its Anthropic investment. Taking that out as well puts its P/E at 30.3, against 28.0 as filed.
Are AI stocks overvalued?
A P/E alone cannot answer that. It shows what investors pay today for profit already earned, not what that profit will be.
Two AI stocks break the pattern. Palantir cost 108 times its yearly profit and AMD 77 times. Today's profit alone would take a century to add up to Palantir's share price. Palantir's sales grew 96% in its latest quarter, and AMD's 45%.
The everyday side has its own exceptions. PepsiCo, Hershey, McDonald's and AutoZone cost less per dollar of profit than Nvidia on both measures in the table, at 18 to 22 times. Procter & Gamble, Home Depot and Colgate-Palmolive did too once one-time items are left out. The market does not price every steady company like Costco.
For the market as a whole, FactSet's October 30 report put the S&P 500 at 25.9 times its past year's profit, above its 10-year average of 23.7. Investors usually read a low P/E as doubt that profit will last, and a high one as confidence that it will last or grow.
Nvidia sits close to that market level. If both prices stayed at Thursday's close, its profit could fall by 49% and it would still cost less per dollar of profit than Costco.
What to watch
- Whether Nvidia's sales reached its $108 billion forecast: its third quarter results on November 17, 2026, as Nvidia announced.
- Whether Micron's sales reached its $61.5 billion forecast: Micron's next quarterly results release, for the quarter ending in late November.
- Where the market's P/E stands after this week's drop: FactSet's weekly Earnings Insight report.
Our numbers
These figures are our calculations from the sources linked in this article. Each P/E uses the last four reported quarters, so it mixes fiscal calendars; the 21% tax on removed gains is the US federal rate, and the everyday companies' own figures without one-time items leave out more kinds of items than the rule used for the AI companies.
- Every P/E in the table: the official close of November 5, 2026 divided by the sum of the last four reported quarters' profit per share from each company's quarterly and annual filings and releases.
- The P/E without one-time items: profit without investment gains and items the company calls one-time, from its own figures or its filed gains after a 21% tax.
- The middle P/Es, 30.3 and about 25: the fifth of the nine AI stocks and the average of the sixth and seventh of the 12 everyday companies, without one-time items.
- Microsoft's 30.3: its four quarters of profit without OpenAI gains, $4.14, $4.27, $4.74 and $4.89 a share, less the $3.2 billion Anthropic gain its June quarter release names, after a 21% tax.
- Costco about twice Nvidia: 51.3 divided by 26.3, and 51.3 divided by 23.0 on the P/E as filed.
- 7 of 9 AI stocks below Costco and Walmart: the count of the nine whose P/E is lower than Walmart's 45.1, which also holds on the P/E as filed.
- Micron's 69%: 1 minus Micron's 8.8 divided by Coca-Cola's 28.8, on past-year profit, assuming both prices stay at the November 5 close.
- Nvidia's 49%: 1 minus 26.3 divided by Costco's 51.3, with the same assumption.
- Nvidia near 27 on Friday morning: its 7:13 a.m. ET price of $188.40 divided by $6.916 of yearly profit without investment gains.
- Alphabet's $129.6 billion and Amazon's four-quarter other income: the sum of four quarters in each company's quarterly and annual filings.
- Spending against cash, July to September 2026: nine months less six months in Alphabet's and Meta's quarterly reports.
- Nvidia's 44%: the sum of the three customers' shares its quarterly report gives.
Frequently asked questions
What is the P/E ratio of Nvidia?
At the November 5, 2026 close of $181.60, Nvidia's P/E was 23.0 on the profit it filed for its last four quarters, $7.91 a share. Without gains on its stakes in other companies it was about 26.3.
Why is Walmart's P/E so high?
Walmart cost about 45 times its yearly profit at the November 5 close, although its sales grew 5.9% in its latest quarter. A likely reason is that its profit comes from a very wide base, about 280 million customer visits a week, not from a few big buyers.
What does a stock's P/E ratio mean?
P/E means price to earnings. It is the share price divided by the profit per share over the last year, so a P/E of 20 means paying $20 for each $1 of yearly profit. StockTitan's P/E ratio calculator does the arithmetic.
What is the P/E of the S&P 500?
FactSet put the S&P 500 at 25.9 times its past year's profit and 18.7 times the profit expected over the next 12 months, in its October 30, 2026 report. The index fell after that date.
Do AI stocks cost more than Costco?
Not most of them. Seven of nine top AI stocks cost less per dollar of past profit than Costco and Walmart, while AMD and Palantir cost more. A low P/E usually means investors doubt the profit will last, and a high one means they expect profit to last or grow.
Sources
- Nvidia, second quarter fiscal 2027 results, August 26, 2026
- Micron, fiscal fourth quarter and full year 2026 results, September 30, 2026
- Costco, fourth quarter and fiscal 2026 results, September 24, 2026
- Walmart, second quarter fiscal 2027 results, August 20, 2026
- Coca-Cola, third quarter 2026 results, October 27, 2026
- McDonald's, third quarter 2026 results, November 4, 2026
- AMD, third quarter 2026 results, November 3, 2026
- Meta, first quarter 2026 results, April 29, 2026
- Nvidia, third quarter results date, October 28, 2026
- StockTitan, Why AI stocks are down today, November 5, 2026
- StockTitan, SK hynix earnings, October 2026
- Nvidia Form 10-Q, quarter to July 26, 2026
- Amazon Form 10-Q, quarter to September 30, 2026
- Alphabet Form 10-Q, quarter to September 30, 2026
- Meta Form 10-Q, quarter to September 30, 2026
- Microsoft Form 10-Q, quarter to September 30, 2026
- Amazon third quarter 2026 results, SEC exhibit 99.1
- Alphabet third quarter 2026 results, SEC exhibit 99.1
- Amazon second quarter 2026 results, SEC exhibit 99.1
- Meta third quarter 2026 results, SEC exhibit 99.1
- Microsoft fiscal 2026 second quarter results
- Microsoft fiscal 2027 first quarter results, SEC exhibit 99.1
- Costco Form 10-K filings
- FactSet, Earnings Insight, October 30, 2026
The information provided in this article is for educational and informational purposes only. It does not constitute financial advice, investment recommendation, or an endorsement of any particular investment strategy. Past performance does not guarantee future results. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions.