Amazon Advertising Growth Decelerates in Q3 2026, Earnings Miss Wall Street Expectations

Amazon reported a cooling in its advertising revenue growth for the third quarter of 2026, failing to meet Wall Street’s revenue and earnings per share forecasts. The e-commerce giant cited the timing of Prime Day and unfavorable foreign exchange rates as primary contributors to the deceleration.

Key Financial Performance

• Advertising Revenue: Growth slowed to 11% in Q3, down from 26% in the previous quarter.
• Net Sales: The company reached $201.9 billion, slightly missing analyst expectations of $202.31 billion.
• Earnings Per Share (EPS): Reported at $1.89, falling short of the estimated $1.96.
• Stock Impact: Shares fell 4% in post-market trading following the announcement.

Operational Highlights

Despite the advertising slowdown, Amazon Web Services (AWS) saw a significant surge, with revenue rising 39% to $46 billion. CEO Andy Jassy highlighted the segment's growth as the fastest in nearly five years, attributing the performance to increased investments in infrastructure and AI-driven capabilities. Jassy noted that the company anticipates AWS growth rates exceeding 40% throughout 2027 and 2028.

Future Outlook

Amazon expects revenue to grow between 12% and 16% in the fourth quarter of 2026, projecting total revenue between $240 billion and $247 billion. While advertising growth is expected to recover to the "high teens" in the next quarter, investors are closely monitoring the impact of macroeconomic variables on retail market share.

To verify these results, interested parties can review the official financial disclosures and the investor relations earnings call transcript available on the Amazon Investor Relations website.