Costco stock finally woke up. Monthly sales came in hot, giving investors reason to believe that last year's sluggish performance on Wall Street won't carry over to 2026. Costco shares surged nearly 5% on Thursday after the retailer posted stronger-than-expected December sales the night before, signaling a return to momentum. U.S. comparable sales for the five weeks ending Jan. 4 rose 6.3% when excluding fluctuations in foreign currencies and gas prices. The advance blew past the 3.5% estimate and marked an acceleration from November's 5.8% gain. It gave investors a new reason to reconsider the bearish narrative that had weighed on the stock. In the early days of 2026, Costco stock rose over 7% after losing nearly 6% last year on concerns about its elevated valuation, slipping membership renewal rates, and slower shopping trends. Jim Cramer believes the tide is turning for Costco. "This is not done" going higher, Jim said during the Morning Meeting for Investing Club members. He added that the stock's underperformance versus Walmart "is not going to continue." Walmart emerged as the stronger performer in 2025, with shares gaining more than 23% last year. Shares have increased less than 2% in 2026. What excites him most is that Costco appears to have put "the low list behind them," Jim said earlier on " Squawk on the Street ." COST 1Y mountain Costco stock 1-year performance. Costco's December strength was seen across categories. Fresh foods grew to high single digits, an increase from November's mid-to-high single-digit range. It was the best performance since July, according to D.A. Davidson. Non-food sales were up mid-single digits, like the prior month. The average transaction size was up 4.2%, an acceleration from 3% in November. The analysts now have comps data for 40 of the 81 days in the company's fiscal 2026 second quarter, which will be out after the market closes on March 5. The quarter is running ahead of D.A. Davidson's model, giving analysts confidence to increase their core U.S. comps estimate in fiscal Q2 to 5.5% from 5.1%, and total comp estimates to 6.9% from 6.7%. Before its earnings release, the Street will get a couple more updates — an investor meeting on Jan. 15 and January sales on Feb. 4. One area that Jim would like to see improvement in is e-commerce. In December, digit comparable sales increased 18.9%, a jump from November's 16.6%, but considerably lower than the prior year's e-commerce growth of 34.4%. We believe management can pull it off, given its dominance as a membership retailer that has renewal rates exceeding 90%. We maintained our $1,050 price target and hold-equivalent 2 rating on the stock. On Dec. 16, we cut our Costco position in half and booked a 200% gain on shares purchased in early 2020. We kept enough on in case of a recovery in the stock. (Jim Cramer's Charitable Trust is long COST. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
