2026 could be Amazon’s year: AWS acceleration and advertising growth

After Amazon (AMZN) underperformed the broader market in 2025, expectations for 2026 have strengthened again. The story isn’t just about revenue growth: some analyst views point to roughly 11% sales growth in 2026, but the more important thesis is that Amazon could grow profit faster than revenue. That’s typically the core logic behind a “comeback” narrative for the stock.

Two engines are driving this thesis: AWS re-accelerating and advertising expanding as a high-margin revenue stream. In Amazon’s official Q3 2025 results, AWS revenue grew 20% year over year to $33.0B. Markets often read that as a sign AWS is moving back into a faster growth lane, supported by demand for cloud and AI infrastructure.

Amazon’s advertising business also delivered strong growth in the same quarter: ad revenue rose 24% to $17.7B. This matters to investors because advertising typically carries higher margins than retail and logistics, meaning it can lift the company’s overall profitability.

This is why 2026 is increasingly framed as a potential turning point: if the core retail business stays steady while higher-margin segments like AWS and ads continue to grow faster, Amazon’s operating profit could expand faster than total revenue. Markets often view that mix—“stable revenue + accelerating earnings”—as supportive of stronger stock performance.

That said, risks remain. Amazon is ramping up spending on AI and infrastructure, which can keep costs elevated. The comeback thesis depends largely on AWS and advertising sustaining their momentum, while cost growth doesn’t pressure margins too heavily.

Note: This text is for informational purposes only and is not investment advice.