Notes: AI Bubble? Refining the Forward ROIC
Summary
* The refined forward ROIC model focuses on Microsoft, Amazon, and Google, excluding Apple and Meta due to differing RPO dynamics and consumer-heavy business models.
* Adjustments made are on boththe denominator (IC) numerator (return) side of ROIC to better align RPO with AI-related capex.
* The revised model yields a two-year forward ROIC of 28.6%, exceeding the estimated two-year forward WACC of 16%, indicating current AI capex remains value-creative.
* While estimates carry unce
