As Big Tech continues to spend aggressively on artificial intelligence, one Wall Street firm believes there is a clear winner when it comes to return on invested capital (ROIC). On August 31, Piper Sandler reiterated an Overweight rating on Amazon (NASDAQ:AMZN) with a $320.00 price target.
According to the firm, AMZN's return on invested capital is holding up far better than giants Meta Platforms, Inc. (NASDAQ: META) and Alphabet Inc. (NASDAQ:GOOGL). Interestingly, the firm projects this ROIC figure to fall from about 17% in 2018-2025 to about 14% in 2026.
Piper's note states the obvious: Amazon spending is more focused on AWS. Revenue for AWS jumped 37% year-over-year to $42.2 billion in Q2, the fastest growth it has had in four years. Meanwhile, AWS contract backlogs at the end of the quarter stood at $496 billion, up from $364 billion in the prior three-month period.
The bull case for Amazon lies in its ROIC, the figure Piper sees deteriorating the least amongst Meta, Alphabet, and Amazon. The note affirms that Amazon is the best-positioned amongst the three, and that its ROIC is the most consistent.
The company-specific ROIC trends generally match management commentary on ROIC, the note stated.
#piper
According to the firm, AMZN's return on invested capital is holding up far better than giants Meta Platforms, Inc. (NASDAQ: META) and Alphabet Inc. (NASDAQ:GOOGL). Interestingly, the firm projects this ROIC figure to fall from about 17% in 2018-2025 to about 14% in 2026.
Piper's note states the obvious: Amazon spending is more focused on AWS. Revenue for AWS jumped 37% year-over-year to $42.2 billion in Q2, the fastest growth it has had in four years. Meanwhile, AWS contract backlogs at the end of the quarter stood at $496 billion, up from $364 billion in the prior three-month period.
The bull case for Amazon lies in its ROIC, the figure Piper sees deteriorating the least amongst Meta, Alphabet, and Amazon. The note affirms that Amazon is the best-positioned amongst the three, and that its ROIC is the most consistent.
The company-specific ROIC trends generally match management commentary on ROIC, the note stated.
#piper
19 hours ago
