Amazon's stock could be supercharged by this growing business

MW Amazon's stock could be supercharged by this growing business

By Christine Ji

Amazon's highly profitable ad business could double in revenue to over $140 billion by 2030, according to a recent report from TD Cowen

A new survey finds that Amazon's advertising business ranks second only to Google in terms of return on investment.

Amazon.com is best known for its e-commerce and cloud businesses, but Wall Street is increasingly paying attention to another segment: advertising.

According to a Tuesday report from TD Cowen, Amazon's (AMZN) digital-advertising business is poised for a breakout year as it captures a growing portion of total ad spending. Analyst John Blackledge raised his price target to $315 from $300 and maintained his buy rating on the stock.

Amazon's market-share gains in digital advertising could be some of the industry's strongest through 2027. The company plays into ads in various ways, including by showing sponsored brands on its e-commerce website, placing commercials on Prime Video content and using its vast amounts of shopper data to target ads across the web.

Blackledge estimates that Amazon's share of global digital advertising, excluding China, will rise to 13.2% in 2030 from 10.6% in 2025. He also estimates that Amazon's advertising revenue will grow from roughly $68.2 billion in 2025 to $141.7 billion in 2030, for an annual growth rate of 16%.

Read on: Amazon's 'crown jewel' is this business that doesn't get nearly enough attention

TD Cowen's 14th annual ad-buyer survey, which polled 49 senior ad buyers, found that 63% of advertisers plan to increase their spending on Amazon in 2026.

The growth is increasingly coming from streaming TV. Adoption of Prime Video ads has ramped up significantly since their broader launch in early 2024. In 2025, 62% of TD Cowen's surveyed buyers advertised on Prime Video, up from 53% in the prior year. For 2026, 72% of buyers expressed interest in Prime Video inventory.

Advertisers are flocking to Amazon's ad platform because of its high return on investment, which ranked just second to Google $(GOOGL)$ $(GOOG)$ in the TD Cowen survey. The increased demand is leading to greater pricing power, Blackledge wrote. The survey suggested that Amazon is able to charge higher-than-average prices for video-streaming ads.

Blackledge called Amazon's ad business a "high margin" driver of operating income, as the digital infrastructure is less capital-intensive than the company's retail operations.

Blackledge also expects Amazon Web Services to continue growing as the company brings more capacity online. Additionally, he pointed out that the e-commerce business is becoming more efficient as ongoing improvements in Amazon's fulfillment network lower operating costs.

TD Cowen forecasts that AWS revenue growth will accelerate to 22.4% year over year in the fourth quarter, marking the third consecutive quarter of faster growth for the unit. The bank anticipates that Amazon's total operating income will hit $27.8 billion in the fourth quarter, beating Wall Street consensus estimates of $24.6 billion.

Read on: Why Amazon and Meta could be standout stocks in the 'Magnificent Seven' this year

-Christine Ji

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January 13, 2026 10:03 ET (15:03 GMT)

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