Amazon Q3 Ad Growth Slumps to 11% as Prime Day Shift Hits Revenue

Amazon’s third-quarter advertising revenue growth slowed to 11%, a sharp deceleration from the 26% increase recorded in the second quarter. The company attributed the decline primarily to unfavorable foreign exchange rates and the decision to move Prime Day to the second quarter in most major markets.

Amazon reported net sales of $201.9 billion and diluted earnings per share of $1.89. These figures fell below the LSEG analyst consensus, which projected revenue of $202.31 billion and earnings of $1.96 per share. Following the release, the company’s stock dropped 4% in post-market trading.

North American revenue rose 6% to $112.9 billion, while international revenue climbed 5% to $43.1 billion. Amazon Web Services, the company’s cloud computing division, posted a 39% year-over-year increase to reach $46 billion. This marked the fastest growth for the sector in nearly five years and exceeded the 20% growth seen in the same quarter last year by nearly 20 percentage points.

Andy Jassy, Amazon’s president and chief executive, cited the company’s investments in infrastructure and functionality in prepared remarks. He noted that the cloud division is operating at a $184 billion revenue run rate and is projected to grow at rates exceeding 40% in both 2027 and 2028.

Jassy described the expansion of artificial intelligence as the biggest transformation of the current lifetime. He stated that increased AI usage drives core capabilities such as reinforcement learning and post-training, which rely on Amazon’s Graviton processors. He emphasized that the company anticipates AWS becoming a trillion-dollar revenue business within the next five to 10 years.

The company projects fourth-quarter revenue to grow between 12% and 16%, placing total sales between $240 billion and $247 billion. Advertising growth is expected to accelerate to the high teens during this period, reversing the slowdown observed in the third quarter.