When the most hyped IPO in stock market history hits, money has to come from somewhere. On June 12, SpaceX made its Nasdaq debut under the ticker SPCX, raising $75 billion in what became the largest IPO on record — and roughly $15 billion of that haul came directly from retail investors, an allocation described by Nasdaq President Nelson Griggs as “larger than most IPOs.”
That’s a staggering amount of cash that had to be liquidated from somewhere. One likely source: premium-priced holdings investors were sitting on — exactly the kind of stocks that look expensive on a spreadsheet but have proven themselves over decades. Costco Wholesale (NASDAQ: COST) fits that description perfectly.
The chart tells the story. COST peaked near $1,096 in May before dropping sharply heading into the SpaceX IPO window. More telling than the price action is the Chaikin Money Flow (CMF) oscillator, which has plunged to -0.30, a reading that signals unusually heavy distribution. Shares are now trading around $965, sitting below their 50-day moving average of $1,002, and the selling pressure looks more institutional and situational than fundamental.
The word “overpriced” gets thrown at Costco regularly. Technically, it’s not wrong. But there’s a difference between a stock that’s expensive and a stock that’s a bad investment. Costco has spent 25 years proving it belongs in the former category. If the SpaceX frenzy is dragging COST lower, long-term investors may want to treat it as a gift.
The Consumer Is Spending — Costco Is Capturing It
The macro hand-wringing about consumer health is real. Credit card delinquencies are elevated. Lower-income households are stretched. Sentiment surveys are grim. And yet the actual spending data keeps coming in stronger than expected — and Costco keeps printing numbers that make the pessimists look wrong.
In its fiscal third quarter of 2026, Costco reported net sales of $69.15 billion, up 11.6% year over year, with comparable sales growing 9.8%. May’s monthly comparable sales then accelerated further to 12.5% growth, with total net sales reaching $24.01 billion — a 14.5% year-over-year increase.
The key insight here is that Costco doesn’t rely on the lower leg of what economists call the K-shaped economy. Its membership model — with worldwide renewal rates of 89.7% and U.S. and Canadian renewal rates at 92.2% — draws disproportionately from middle- and upper-income households. These are consumers who are still spending, still traveling, and still renewing their $65 or $130 memberships without a second thought.
In an environment where value perception matters more than ever, Costco’s proposition actually gets stronger. When consumers trade down from specialty grocers or department stores, they frequently trade sideways into Costco. The bulk-buy model becomes a feature, not just a habit. That’s a competitive moat that doesn’t show up cleanly in any single earnings line — but it shows up quarter after quarter.
The Dividend Nobody Talks About
Costco’s headline yield is easy to dismiss. The trailing twelve-month dividend payout stands at $5.20 per share, translating to a yield of roughly 0.52% at current prices. Against a 10-year Treasury, that looks laughable.
But that framing misses how Costco actually returns capital. The company paid a $12-per-share special dividend in January 2026 — a single payment totaling approximately $5.3 billion, continuing a tradition of extraordinary capital returns. That’s on top of the regular quarterly dividend, which has compounded at a growth rate of roughly 13% annually over the past five years.
The pattern is consistent: Costco uses its regular dividend for steady, predictable income growth, and then periodically drops a special dividend when the balance sheet allows. For investors who bought at lower prices and held, the special payout in early 2024 amounted to a one-time yield of 2.4% for shareholders who bought just before the announcement — more than double what the average S&P 500 company pays in two years. With the stock now pulling back toward the $960s, the yield-on-cost math for buyers at these levels looks incrementally better — and another special dividend remains well within Costco’s capital allocation playbook.
What the Chart Is Actually Saying
COST’s technical picture deserves more attention than a simple “it pulled back” summary. The stock recently made an all-time high above $1,096 in mid-May, then reversed sharply. That kind of move, from a 52-week high that coincides exactly with the SpaceX IPO window, is not coincidental.
The CMF oscillator, which tracks the flow of money into and out of a security over a rolling 20-day period, has collapsed to -0.30 — one of the deepest negative readings on the chart over the past year. Extreme CMF readings like this tend to resolve when the technical selling pressure exhausts itself, particularly when the underlying business hasn’t changed.
The 50-day SMA at $1,002 is now acting as overhead resistance, but a stock with Costco’s fundamental consistency doesn’t tend to stay far below that line for long. The selling here looks transactional, not a verdict on the business. Investors who can tolerate near-term volatility may see an attractive entry point.
The Stock Split Question
One piece of Costco mythology worth addressing: the idea that a stock split would be a meaningful catalyst. Costco’s management has publicly stated that a stock split is not a priority, citing the widespread availability of fractional share investing. The company’s last split occurred in January 2000, and management has historically cited deep institutional ownership as a reason splitting carries less economic necessity in today’s market.
With roughly 66% institutional ownership, that argument holds up. The investors who move COST don’t need psychological accessibility — they’re buying $50 million blocks at a time.
The contrarian take is that Costco might be wise to consider a split while it’s still a nice-to-do rather than a have-to-do. When a share price crosses $1,000 and dips back below it — as is happening right now — the narrative around accessibility starts to build on its own. The counterargument: with comps accelerating and the membership model intact, Costco doesn’t need a split to attract attention. The business is doing that just fine.
The Bottom Line
Costco isn’t a bargain in any traditional sense. At roughly 50x earnings, you’re paying a premium for one of the most durable retail franchises ever built. But the SpaceX IPO created a rare window where situational selling — not fundamental deterioration — has pushed shares meaningfully lower.
With year-to-date net sales up 9.6% through 36 weeks and the membership renewal engine running at near-record levels, nothing has changed about the underlying business. The question isn’t whether COST is cheap. It isn’t. The question is whether you want to own one of retail’s best long-term compounders at a price that wouldn’t exist without Elon Musk’s rocket company. For patient investors, the answer looks like yes.
