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

Meta and Google’s AI Returns Slide, Piper Sandler Says Amazon’s Capital Discipline Sets It Apart Ghazal Ahmed Wed, September 2, 2026 at 12:20 PM GMT+2 3 min read GOOG META AMZN 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. AWS: The Visible Path for Amazon 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. Why Amazon is Different from Meta and Alphabet Piper compared Amazon's ROIC to Meta and Alphabet, noting that it faces the least ROIC deterioration amongst the three.

It estimated that the deterioration from 2024 to 2027 for Meta will likely be around 27 percentage points for Meta and 26 percentage points for Alphabet. These declines are far steeper than projected numbers for Amazon. Part of this difference, the firm believes, arises from where the spending is going.

Alphabet and Meta are generally spending on building frontier models, while Amazon's spending is mostly focused on AWS. AWS is highly monetized while Meta and Alphabet remain having revenue payoffs that are not only harder to measure in terms of time and money. The Bear Case A projected 14% ROIC for Amazon is still below its average of 17%.

While Amazon's ROIC remains the least deteriorated amongst the three, it is still declining. If AWS capacity additions outpace demand, or even pricing competition intensifies, it could compress the company's ROIC even further. Hedge Fund and Analysis Hedge fund filings show support for Amazon's bull case.

At the end of Q2 2o26, 369 hedge funds held positions in the stock, up from 353 in the prior quarter. Short interest also shows limited bearish skepticism, with an estimated 95. 30 million to 98.

43 million shares, and representing about 0. 97% to 1. 00% of its public float.

Story Continues Meanwhile, 254 hedge funds held positions in Meta, down from 262 in the prior quarter. Hedge fund interest has been increasing for Alphabet. 275 hedge funds held positions in Alphabet at the end of Q2, up from 265 in the previous quarter.

Overall, Piper's note is more of a discussion regarding who has the most clearest path to monetization. While Amazon's ROIC may be falling, it may still be able to maintain a strong return profile than peers provided AWS can keep converting spending into monetizable capacity. While we acknowledge the potential of AMZN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk.

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  and As AI Models Become Commoditized, Palantir Is Betting Its Ontology Is the New Moat Disclosure: None. Follow Insider Monkey on Google News .