Prediction: 3 Stocks That'll Be Worth More Than Costco 10 Years From Now

Selena Maranjian, The Motley Fool

Tue, Apr 15, 2025, 6:45 AM 5 min read

It's not an easy matter to make predictions about the stock market, since no one really knows what it will do from day to day or even year to year. (Over long periods, though, it has always gone up.)

Still, I'm here to make a prediction, and I'm predicting that three stocks in particular will be worth more than Costco Wholesale (NASDAQ: COST) a decade from now. Here's a look at those companies -- and at Costco too.

First off, why am I focusing on Costco? Don't I like it? Well, I do, and I'm a longtime shareholder. But arguably, the stock price has gotten ahead of itself at recent levels. Costco's forward-looking price-to-earnings (P/E) ratio, for example, was recently 50, well above its five-year average of 39. Its recent price-to-sales ratio was 1.53, above the five-year average of 1.08.

With 903 locations worldwide (623 in the U.S. and Puerto Rico) and a recent market value of $428 billion, it may be hard for Costco to grow at a rapid clip. Also, if a widely feared recession happens, maybe Costco will see some customers let their $65-per-year memberships lapse, as they fear spending too much at visits to Costco. (Costco does have lots of great prices, but it can be hard to not spend a lot there.)

Costco has averaged annual gains of around 20% over the past 10 and 15 years. Let's be a little conservative and estimate a 12% growth rate for the coming decade. That would put its market value at $1.3 trillion in a decade.

Taiwan Semiconductor Manufacturing (NYSE: TSM) is a giant among semiconductor companies.  While most only design chips, Taiwan Semiconductor actually manufactures them. It's the biggest chip maker by far -- with a recent market share of 67%.

There's a lot to like about the company, such as its apparent joint venture with U.S.-based Intel. As there's pressure to make more chips in the U.S., this could benefit both companies. Taiwan Semiconductor has always planned to invest more than $100 billion in U.S.-based plants. Apple is likely to be a major customer of Taiwan Semi's U.S.-built chips. Meanwhile, the company is getting a tailwind from the proliferation of artificial intelligence (AI), as it requires more and better chips.

The company's stock seems reasonably priced at recent levels. Shares have grown in value at an average annual rate of around 20% over the past 10 and 15 years. If they grow by just 10%, that will take the market value from a recent $823 billion to $2.1 trillion.

Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is another likely company to be worth more than Costco in a decade. That may not be a surprise, because it's already worth more, with a recent market value of $1.9 trillion. Thus, even if there is a big recession, Alphabet is likely to remain bigger. Better still, it's undervalued, with a recent forward P/E of 16.3 -- well below the five-year average of 22.5. (That's partly due to a recent disappointing earnings report coupled with ambitious spending plans.)