Key Points
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Advertising services is one of Amazon's fastest-growing businesses.
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Because the company makes little information about the performance of its ad business public, investors may not be fully recognizing the value of the segment.
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Consumers know Amazon (NASDAQ: AMZN) best for its retail footprint. Investors, who tend to do a deeper dive on the company, tend to focus on the profitability of Amazon Web Services and Amazon's AI business.
Nonetheless, one other source of revenue has driven higher growth. Better still, that business directly leverages the company's e-commerce site, which is visited by an estimated 2.2 billion people monthly.
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Amazon's lesser-known business segment
Investors often forget about Amazon's advertising services business.
Advertising services generated over $17 billion in net sales in the first quarter of 2026, about 9.5% of the company's total. On a trailing-12-month basis, it grew by 24% year over year. That was well above the 17% net sales growth for the overall company, and third only to AWS and Amazon's "other" category in terms of growth.
Admittedly, Amazon itself is probably to blame for this segment attracting relatively little attention. The only metric the company publishes for this business is net sales. Moreover, Amazon divides its advertising services revenues among the North America and international segments, and offers no clarity about how much it contributes to each of them.
So investors have no idea how much operating income the ad business generates. This is significant because such ad businesses tend to have little additional overhead as they scale. Since Amazon has underperformed in 2026, knowing more about how that segment is performing could give investors a reason to buy the stock.
Ultimately, the outlook for the advertising business is probably an excellent reason to buy Amazon stock. It will probably remain a vibrant growth area for the company. Furthermore, even if Amazon chooses not to provide more clarity on how advertising benefits the company's financials, having a major business that's growing as fast as its advertising services unit is can only be good for the consumer discretionary stock over the long term.
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Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.