Meta and Google’s AI Returns Slide, Piper Sandler Says Amazon’s Capital Discipline Sets It Apart

Big Tech's spending on artificial intelligence is causing a decline in return on invested capital (ROIC), according to Piper Sandler. In an August 31 report, the firm reaffirmed an Overweight rating on Amazon (NASDAQ: AMZN) with a $320.00 price target, citing that AMZN's ROIC is holding up better than Meta Platforms (NASDAQ: META) and Alphabet Inc. (NASDAQ: GOOGL).

The firm projects a drop in AMZN's ROIC from 17% in 2018-2025 to 14% in 2026, while the figures for Meta and Alphabet are expected to fall by 27 and 26 percentage points, respectively, between 2024 and 2027. Generally, Amazon's ROIC is more consistent and better positioned than Meta and Alphabet, as per the note. The company's spending is mainly focused on AWS, which has seen a 37% year-over-year revenue increase to $42.2 billion in Q2, with a $496 billion contract backlog.

However, if AWS capacity additions don't match demand or pricing competition intensifies, Amazon's ROIC could decline further. Hedge fund interest in Amazon remains bullish, with 369 funds holding positions as of Q2 2026, up from 353 in the previous quarter.