Stocking Up: Groceries vs. AI

It sounds like an odd comparison: should investors be more concerned about the cost of groceries or the rise of artificial intelligence? But the question actually highlights a meaningful point about how markets value different types of companies.

A common way to evaluate whether a stock is “expensive” or “cheap” is by looking at its price-to-earnings (P/E) ratio, which compares a company’s current share price to its earnings per share. A higher P/E suggests investors expect stronger future growth; a lower P/E implies more modest expectations.

Consider this: a well-known membership-based warehouse retailer currently trades at a P/E of 46, while one of the world’s top AI semiconductor makers trades at a P/E of 28.

It raises an interesting question: Which is more likely to reshape the world — bulk groceries or chips capable of performing trillions of calculations per second?

Some skeptics have compared today’s AI boom to the dot-com era, but the similarities are limited. In March 2000, Barron’s ran its famous “Burning Up” cover story revealing that 74% of 207 public internet companies had negative cash flow, and more than 50 were on track to run out of money within a year. Today’s major AI players, by contrast, are generating strong and consistent quarterly results — a very different picture from the early 2000s.

What Should Investors Take Away?

If recent headlines are making you uneasy, let’s talk. When we built your investment strategy, we aligned your goals, timeline, and risk tolerance. But if the rapid pace of the AI cycle has you feeling uncertain, a conversation may help put things into perspective.

^{The content provided is for informational and educational purposes only and should not be considered a recommendation to buy, sell, or hold any particular security. The discussion of NVIDIA and Costco is based on publicly available information and should not be interpreted as personalized investment advice. Investing in individual securities involves risk, including the potential loss of principal. Before making any investment decision, you should consult with a qualified financial professional to determine what is appropriate for your individual financial situation. Past performance is not indicative of future results.}

^{Finance.Yahoo.com, November 14, 2025, “NVIDIA Corporation (NVDA)”}

^{Finance.Yahoo.com, November 14, 2025, “Costco Wholesale Corporation (COST)”}

^{Barrons.com, March 20, 2000, “Burning Up”}

^{FactSet.com, November 14, 2025. "Earnings Insight"} 

^{McKinsey.com, 2025, “The state of AI in 2025: Agents, innovation, and transformation”}