Amazon’s Ad Business Grew Faster Than the Company’s Overall Growth in Q3

The numbers

$14.3 billion — The amount Amazon made from net sales of its advertising services in Q3, up 19% year-over-year. Ads made up almost 9% of Amazon’s total sales.

11% — Amazon’s overall net sales jumped 11% year-over-year to $158.9 billion.

55% — How much overall net income increased, year-over-year. It was $15.3 billion in Q3.

The water cooler talk

Amazon is projecting a big holiday sales season, and continues to invest in and emphasize its generative AI capabilities.

The company launched new AI-powered shopping assistant, Rufus, during the third quarter. It also debuted AI-powered shopping guides, an AI assistant for sellers, and more advanced tools for advertisers to create AI-generated video, live photos, and audio ads.

Looking ahead to Q4, Amazon said it will hire 250,000 additional staff for the holiday season, and expects to see up to $188.5 billion in sales next quarter.

The key quote

“We expect to spend about $75 billion [in capital expenditures] in 2024. I suspect we’ll spend more than that in 2025,” Andy Jassy, Amazon president and CEO said. The majority of that investment will be for AWS and driven by generative AI investments. “It is a really unusually large, maybe once in a lifetime type of opportunity.”

In the long term, Jassy added that Amazon expects “very healthy margins” on generative AI.