Amazon’s revenue derived from advertising grew 12% year over year to $19.6 billion in Q3 as changes to the timing of key sales events and streaming programs affected performance, according to an earnings statement. Those results mark a noteworthy deceleration in the rate of growth from the year-ago period, when Amazon’s ad segment was up 22%, as well as Q2 2026, which delivered ads revenue growth of 26%. Amazon’s stock tanked following the report, which missed analyst expectations on several key fronts, including advertising.
The e-commerce giant in the release attributed the ad shortfall in Q3 to “timing anomalies” stemming from Prime Day. Amazon moved the dayslong deals bonanza from July to June for the first time in several years, which shifted when the windfall from Prime Day landed. Scheduling of the NBA season on Prime Video — Q2 and Q4 both have pro basketball programming, while Q3 does not — further slowed momentum. Amazon in Q3 also lapped a point in time last year when it overhauled its search marketing programs in a way that helped monetize traffic at a higher rate, executives explained.
One area not worrying Amazon quite yet is the impact of artificial intelligence agents that can disintermediate the role advertising plays on the shopping journey. Consumer-facing personal agents that can hunt for deals and shop on the users’ behalf, including Meta’s Muse, have quickly become popular. Amazon blocked Muse from accessing its e-commerce marketplace last month.
“A natural question is whether agentic shopping from external horizontal agents is meaningfully impacting Amazon Ads, and the answer is no,” Amazon CEO Andy Jassy said on a call discussing the Q3 earnings with investors. “Few customers are doing much shopping this way yet, as the experience is still not great nor more convenient than coming to a retailer directly to research or one-click order there.”
Amazon is advancing its own bets in the agentic space, including an Ads Agent that helps marketers build, optimize and run campaigns based on parameters like budget and duration. Ads Agent in September introduced full-funnel capabilities, meaning it can unify sponsored ads, display, video and streaming TV in one effort.
Amazon’s Q3 earnings echo that of other digital ad platforms. Google also posted a slowdown for its core search and YouTube services amid a transition to AI products that are slower to monetize. The tech category generally is coming under greater pressure to justify steep spending on AI. Amazon’s capital expenditures reached $75.9 billion in Q3 while negative free cash flow hit $42.4 billion.
Amazon forecasts ad revenue growth to be in the high teens in Q4, a critical period that includes the holidays. That will be another slowdown compared to the same period last year, when ads grew 22%.
