Piper Sandler Reaffirms Overweight Rating for Amazon Amid Strong Return on Capital
Piper Sandler has reaffirmed its Overweight rating for Amazon (NASDAQ:AMZN), citing its strong return on invested capital and attractive valuation. The firm noted that Amazon's average ROIC from 2018 to 2025 was approximately 17%, compared to a projected 14% for 2026.
Amazon's stock trades at a P/E ratio of 21.34, with a low PEG ratio of 0.24, indicating its undervalued status relative to growth prospects. In contrast, Alphabet and Meta have seen significant ROIC deterioration, down 27 percentage points and 26 percentage points respectively from 2024 to 2027.
Amazon's capital spending is focused on its AWS cloud computing business, with recent investments in DuckLabs and wind farms supporting its data center operations. Piper Sandler also highlighted the company's logistics strength and expansion of AWS with NVIDIA GPUs.