Amazon Beats Meta and Alphabet with Consistent Return on Invested Capital
A recent analysis by Piper Sandler highlights Amazon's (AMZN) strong return on invested capital (ROIC), which stood at approximately 17% from 2018 to 2025. This is in contrast to Meta and Alphabet, whose ROIC is projected to decline by 27 and 26 percentage points, respectively, through 2027.
The analysis suggests that Amazon's focus on its cloud business, particularly AWS, has led to higher profitability compared to Meta and Alphabet's investments in frontier AI models. AWS posted a 39% operating margin in the second quarter of 2026, expanding over 650 basis points year over year.
Piper Sandler reiterated an Overweight rating and $320 price target on Amazon, citing its consistent ROIC. The company's management has explained that data centers monetize for 30-plus years after opening, while servers and networking equipment are purchased just a few months before deployment against visible customer demand.