Amazon ad revenue rises 12% to $19.6 billion in Q3, misses estimates

Amazon has reported $19.6 billion in advertising revenue in the third quarter of 2026, up 12% year-on-year, but the figure came in below Wall Street expectations and marked the company’s first advertising miss in seven quarters.

The slowdown is notable because advertising has been one of Amazon’s fastest-growing and highest-margin businesses in recent years, benefiting from the company’s ability to target users close to the point of purchase.

CEO Andy Jassy said he expects advertising growth to return to the high teens in the fourth quarter, with the timing of Prime Day affecting the year-on-year comparison in Q3.

The advertising performance came alongside strong growth in Amazon Web Services. AWS revenue rose 39% to $46 billion, its fastest growth rate in nearly five years and ahead of analyst expectations, as demand for AI infrastructure and cloud computing remained strong.

Amazon’s broader outlook, however, disappointed investors. The company forecast fourth-quarter revenue of $240 billion to $247 billion, with the midpoint slightly below market estimates, raising concerns about the strength of holiday-season consumer spending.

The company is also spending heavily to expand its AI infrastructure. Amazon expects capital expenditure of around $220 billion in 2026, with Jassy indicating that spending will rise “meaningfully” again next year. Trailing 12-month free cash flow turned sharply negative as capital expenditure outpaced operating cash generation.

For advertisers, the quarter suggests that Amazon’s retail-media engine remains substantial but is not immune to volatility. The company continues to expand its advertising products beyond traditional sponsored listings, including new AI-led formats and services designed to capture consumer intent across its wider ecosystem.

The broader strategic picture remains unchanged: Amazon is trying to monetise the same consumer relationship across commerce, advertising, cloud and AI, but Q3 shows that even its advertising business can face periods of slower growth while investment requirements elsewhere in the company continue to surge.