The holidays have arrived, and consumers have started heading out, or logging in, to engage with their favorite retailers for gifts, parties, and travel, among other seasonal favorites.
There’s a lot of money at stake. According to the National Retail Federation, U.S. retailers are staring down a trillion-dollar holiday shopping season, with November-December sales expected to top $1 trillion for the first time on record.
While that’s cheerful news on the consumer-spending front narrative, it won’t lift all retail stocks equally. The holidays are a bellwether for value-driven, promotion-heavy retailers, so Wall Street is watching closely as they look to leverage multiple ways to play the same holiday spending wave, led by big-box value, e-commerce scale, and premium discretionary portfolio strategies.
“A good retail stock usually makes a large portion of the sales during the gift-giving season,” said Kevin Grebbien, founder at Quick Quant, a San Diego-based automated stock analysis company. “These can be big brick-and-mortar stores, or even online retailers. What makes a good one to invest in is one that has most, if not all, of its sales during the holiday. Just think of those pop-up Halloween stores in early autumn.”
Here are three of them to invest in now.
Grebbien said online retailers could be a good buy for investors right now, especially if they have partnered with a company like Amazon to help fill their orders. But it’s equally smart to study consumer buying patterns before buying any sector stocks.
“Main Street investors usually pick a brand that they know,” he said. “This can be a benefit if the company is starting more local and it will grow substantially, but often we invest (or don’t invest) emotionally into companies we like, even if fundamentally they are not good investments.”
Strong holiday retail stocks usually also have fairly predictable seasonal demand, high brand loyalty, and a track record of converting foot and online traffic into strong margins during what’s the most important quarter of the year for most. “Strong Q4 performers generally have wide gift assortments, reliable supply chains, strong online presence and fulfillment, and promotional strategies that balance volume with profitability,” said Paul Holmes, a stock market analyst at BrokerListings.com.
Having a way to reach customers through multiple channels is also essential. “That’s the case whether it’s through brick-and-mortar shops, social media, and their own web properties, the latter of which is increasingly important,” Holmes said.
Loyal customer bases and membership ecosystems can also help, whether that’s loyalty apps, discount clubs, or free shipping tiers. “This helps to increase average order value and repeat purchases,” Holmes added. “Inventory planning is also important to protect margins and reduce the post-holidays markdown risk.”
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Three Retail Picks For Your Holiday Stocking
Make no mistake, holiday sales are still make-or-break. November-December can account for up to 20–30% of annual sales for many retailers, so even a 1%–2% surprise in holiday comps can move the stocks.
Sector winners are the retailers with the most e-commerce and efficiency plays. That means kicking some tires on platforms with strong logistics, data, and AI-driven pricing that gain share when shoppers are deal-hunting. Here are a few candidates that, by and large, meet those requirements.
Up 23.5% year-to-date, this Bolingbrook, Il.-based retail beauty products company is in a good position right now. It’s treated loyal investors right over time, with $1,000 invested in Ulta 15 years ago turning into $16,288 today.
“ULTA is a strong pick as beauty is one of the most popular gift categories,” Holmes said. “Their exclusive brands also maintain margins even with higher promotional discounts.”
The retailer’s also expanding overseas, opening its first store in the Middle East, in Kuwait. That’s on top of its 1,500 freestanding stores in the U.S, a strong digital presence, and an expected 14.8% revenue uptick in the next three years. Trading at $537 per share right now, consensus analyst sentiment expects that figure to rise to $579 over the next 12 months.
It’s no shocker to see Amazon at the top of retail “buy” lists, but there’s little question that it belongs in the sector’s top tier. Not many companies can say that a strong holiday quarter typically shows up twice; once in retail and again in high-margin ad revenue.
“Amazon is a retail leader with diverse, resilient business models that can effectively manage the peak holiday shopping season through strong e-commerce and extensive physical footprints,” said Chunyang Shen, a high-end investor and founder of Jarsy Inc., an AI-powered fintech company that provides investors easy access to pre-IPO companies.
Amazon has also mastered the fine art of capturing a lot of last-minute shoppers. “That comes from the sheer e-commerce volume it does across so many product categories,” Holmes said. “AMZN also comes with more influence from its wider role in the technology sector.”
Amazon also enters 2026 with accelerating ad revenue, which could become its biggest margin lever after AWS. Additionally, expect more AI personalization, faster delivery windows, and expansion of regional fulfillment hubs. Investors should also note that AMZN will likely continue to steal market share from brick-and-mortar as holiday shopping continues to shift online; expect double-digit North American retail growth if the macro stays stable.
Costco’s per-share price is rich at $908, although the stock has traded flat so far in 2025, up only 1% for the year. Yet Costco shares have risen 140% over the past five years, and valuations are moderately lower at 45 times 2026 earnings, down from 50 times earnings earlier in 2025. The retailer is also coming into the holiday season on a heater, with sales up 8.6% to $21.75 billion for the four weeks ended Nov. 2.
“COST sells at lower gross margins and relies on membership loyalty among a mostly middle- to upper-middle-income customer base to cover its operating expenses,” Holmes said. “Costco has gift baskets, jewelry, electronics, and other higher-value items that are popular during the holidays. Membership renewals help keep operating profit stable outside of peak shopping periods. Membership fees are 73% of Costco’s operating profit, even though they’re a much smaller proportion of revenue.”
Do Your Homework on Holiday Stocks
With good cheer surrounding the last five weeks of 2025, it’s easy for investors to take their eye off the ball during the holidays. But you can’t do that when vetting retail stocks.
“The biggest mistake investors make is failing to monitor the retail sector closely,” Shen said. “The retail landscape shifts rapidly, especially during the holidays. Failing to monitor real-time sales reports, inventory issues, or supply chain bottlenecks can mean missing crucial warning signs.”
Also, consider post-holiday performance, which should not be neglected. “The period after Christmas involves significant returns and exchanges,” Shen added. “Investors often overlook how efficiently a retailer manages this post-holiday phase, which impacts profitability and customer loyalty in the long term.”
