Amazon’s advertising segment reported Q4 2025 revenues of $21.3 billion, a 22% year-over-year increase. The growth is driven by strong demand for sponsored products and the company’s ability to utilize first-party shopping data for targeted advertising, positioning it favorably against competitors like Alphabet and Meta Platforms.
Amazon’s expansion into upper-funnel advertising formats, such as its ad-supported Prime Video model, reportedly reaches 315 million viewers across 16 countries. This growth momentum is reflected in the forecast for Q1 2026 advertising revenues, estimated at $16.9 billion, suggesting a year-over-year increase of 21.3%.
Despite robust growth, challenges remain, including escalating competition in digital advertising and uncertainties in advertiser spending. Amazon’s stock has decreased 8.9% over the past six months, while the industry averages show a decline of 15.7% and 7.3% for internet commerce and retail-wholesale sectors, respectively.
