Amazon ‘S Cloud and Retail Juggernauts Right Most of the Attention on Wall Street. But there’s a Lesser-KNOWN gem decided a bigger and bigger part of the company’s overall business. Amazon’s ad business, which launched in 2008 to help brands market products on its platform, have seen incredible growth since the company started breaking out the segment in 2021. Recorded $ 31.2 billion in sales, according to factset, and represented 6.6% of Amazon’s Total Revenue. Last year, advertising services was the company’s fastest-going segment-UP 19.8% Year Over Year to $ 56.2 Billion and Accounting for Nearly 9% of Total 2024 Revenue of $ 638 billion. For comparison purposes, Amazon Web Services (AWS) cloud sales in 2024 graw 18.5% to $ 107.6 billion. AWS was Nearly 17% of Total Sales. Its retail business, include online and physical store sales and third-party services revenue, Grew more than 8% to $ 424 billion last year, representing just over-thirds of Total Revenue. Even better than amazon’s advertising sales is its profitability. While the company does not break out margins, Evercore isi estimates Amazon’s Ad Profit Margin to be Around 30% to 40%. That’s way higher than retail and on par with aws. “The two fastest growing elements of the business, AWS and advertising, have the Highest Margins,” Said Evercore Analyst Mark Mahaney, Who Called Amazon One of “The Best Mix Shift Stories you can find fond in tech land.” Amazon’s Ad Business Growth is more than Holding Its Own, even thought it’s small internal and when compared to meta platforms ‘ad revenue, which grew 22% to $ 161 billion in 2024, and alphabet’ Google, which Grew 11% to Roughly $ 265 Billion. It is, however, bigger than alphabet’s youtube, which last year grew 14.7% to generate $ 36.15 billion in ad revenue. Amazon’s sponsored products and display ads are currently the main drivers of ad segment sales. The next leg of growth will likely come from Placing more and more ads on prime video, which accounts for only a small portion of ad sales. “Now that Netflix and Apple tv have ads, that’s open the door for prime to include higher ad loads in its package,” said da davidson’s gil luria – and thus, FURELING SRVITISING SERVICES SERVICES GROWTH. To be sure, while still expected to be robust, wedding sees amazon advertising services growth rate delerating to 17.3% in 2025, which is a bit lower than the factset consensus estimate flow 18% FOLLL-FOLL-FOLL-FOLL-FOLL-FOLL-FOLL-FOLL-FOLL Growth. Wedbush’s Scott Devitt Attributes The Deception to “a Bigger Revenue Base which Results in Natural Revenue Slowdown.” However, he added, ad revonue bill reachelet through “new stimulants for growth” Coming from Placing more ads on video and expanding amazon’s ad services off the platform. Devitt also Estimates that Amazon’s advertising margin could be hovering Around 60%, ALTHOUGH he noted that this may not be a precise Figure Since Its Its Not Disclosed by the Company. That’s also Quite a bit higher than the estimates from evercore’s mahanney. AMZN 5y Mountain Amazon 5 Years Another Important Catalyst for Amazon’s Ad Business is allowing advertisers to place inventory beyond its platform through retail ad service, lanchasths. It allows other e-commerce retailers to use amazon’s ad technology to place targeted ads on their own sites and more broadly scale their independent offerings. TD COWEN Expects This Initiative will “Support Amazon’s Ad Revenue Growth as it should Attract A Greater Share of Ad Spend Amid Amid Amid Higher Overall Ad Inventory,” The Analysts Wrote in their Analysts WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES WROTES Survey on Jan. 13. With this move, “Amazon is getting more into google’s market,” Da davidson’s luria said, explaining that google is by far the dominant player in creating an ad network Supply. But he argued amazon is creeping into this space because of its own “rich marketplace for ads.” Amazon’s Booming Advertising Business is deeply linked to the strength of its retail platform. The more people shop on amazon, the more valuable its ads become, according to luria. “The key to undersrstanding amazon’s advertising business is part of the flywheel,” He said, explaining that as shoppers boy across more categories, adlacements, adlacement more effective. Evercore’s mahaney echoed this Sentimen, Emphasizing that Amazon’s ad revenue wouldn’t exist with its massive retail business. “The Vast Majority of the Ad Revenue is tied to retail sales through their sponsored lists,” He said, calling it an “ancillary business” that has transformed into a major success. Bottom Line Jim Cramer said amazon is just getting started with its advertising business. The company’s “initiatives run faster than they can monetize,” jim noted on tuesday, highlighting the ad businesses as a key options, particularly within prime video. While the market reacted negatively to amazon’s recent first-Quarter Forecast, Giving Back Some of Its Year-to-Date Stock Gains, Jim Points Out that the Company often Own Own Own Own Own Guidance. “You can’t judge amazon by its outlook since there are many positive things that happen intra-quarter, like the incredible turns in europe, which could last for years,” He said, “he said. We also continue to watch amazon’s ongoing employees to cut costs and improve profit margins. Taking all of this Into Consideration, Jim Sees Amazon as a Buying Opportunity on Dips for Investors who Want to Beef Up Up their positions. The Club Last Purchased Amazon Shares Back in August for Around $ 168 Each. The stock, which closed wedding at $ 226.63 per share, closed at an all-time high of $ 242.06 on Feb. 4. Our price target on the stock is $ 240. (Jim Cramer’s Charitable Trust is long amzn. See here for a full list of the stocks. Jim Waits 45 Minutes after Sending a Trade Alert Before Buying or Selling a Stock in his Charitable Trust’s Portfolio. If jim has talked about a stock on CNBC TV, He Waits 72 hours after is the trade alert alert before executing the trap. The Above Investing Club Information is Subject to our terms and conditions and privacy policy, together with our disclaimer. No fiduciary obligation or duty exists, or is created, by virtue of your receipt of any information provided in connection with the investment club. No specific outcome or profit is guaranteed.
Barcelona, Spain – March 2: The Amazon Ads Logo, The Advertising Solutions Service Formerly Know as AMD or Amazon Marketing Services, DURING THE MOBLE CORLD CONGRERSS 2023 on MARCH 2, 2023, in Barkelona, Spain. (Photo by Joan Cros/Nurphoto Via Getty Images)
Nurphoto | Nurphoto | Getty Images
Amazon‘S cloud and retail juggernauts rightly get most of the Attention on Wall Street. But there’s a Lesser-KNOWN gem decided a bigger and bigger part of the company’s overall business.
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