Amazon's Advertising Business Shows Significant Growth Potential
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 27 2026
0mins
Should l Buy AMZN?
Source: Fool
- Cloud Market Advantage: Amazon's dominance in the cloud computing sector, with AWS generating $35.6 billion in revenue, positions it strongly, while advertising revenue of $21.3 billion shows comparable growth, indicating the robust potential of its advertising business to further solidify Amazon's market position.
- High Profit Margins in Advertising: The digital advertising segment boasts high profit margins, with the marginal cost of showing additional ads being negligible, which means that as the ad business expands, it significantly boosts overall profitability compared to AWS's margins.
- Data-Driven Advertising Precision: Amazon leverages extensive consumer data to enable highly targeted advertising, where increased consumer activity enhances data richness, leading to better ad performance and attracting more advertisers, thereby strengthening its competitive edge in the market.
- Long-Term Growth Potential: While a potential recession may temporarily impact advertising budgets, the advertising business is expected to be a key driver of revenue and earnings growth for Amazon in the long run, making it a compelling reason for investors to consider the stock's future performance.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 210.570
Low
175.00
Averages
280.01
High
325.00
Current: 210.570
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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