I don't have a citation, but I have read repeatedly that stock analysts cite "overpaying" their workers as a place where they could cut costs and boost short term profits.

Stock analysts is not the same thing as rivals, though. If people think it's needlessly costly, competitors would cheer because their competitor is pricing themselves out of the market. As for stock analysts, if it turns out Costco gets more efficiency out of their better-paid employees because they're better, more motivated and less likely to leave, then that will eventually reflect in profits and stock price.

Amazon is know for a large capital investment and their stock has gone up even though they could cut costs and increase their margins.

Capital investment != labor costs