Amazon.com Amazon Advertising: Third Largest Digital Ad Platform, High Growth/High Margin, & Beneficiary of AI/Agentic

Research evidence excerpt

Amazon.com Amazon Advertising: Third Largest Digital Ad Platform, High Growth/High Margin, & Beneficiary of AI/Agentic

J P M O R G A N North America Equity Research

26 June 2026

Amazon.com Overweight

AMZN, AMZN US

Amazon Advertising: Third Largest Digital Ad Platform, Price (25 Jun 26):$227.01

High Growth/High Margin, & Beneficiary of AI/Agentic Price Target (Dec-26):$330.00

Following up on last week’s Retail vs. AMZN Episode 14: Retail vs. AMZN in an Internet - Large Cap / Mid & Small

Agentic World (report, slides, video replay) published w/JPM Retail analyst Chris Cap

Horvers, this section highlights our analysis of AMZN’s Ad business across its Doug Anmuth AC

~9% global market share of digital ads, revenue growth & OI contribution, ad (1-212) 622-6571

product suite, & Prime Video ad revenue projections. We believe AI/LLMs should douglas.anmuth@jpmorgan.com

further enhance ad ranking & retrieval models while driving higher ROAS/ Bryan M. Smilek

conversions, and we view AI platform threats as relatively limited. Amazon (1-212) 622-8886

remains a best idea & on the JPM Analyst Focus List. Our December 2026 PT bryan.smilek@jpmorgan.com

J.P. Morgan Securities LLC

of $330 is based on ~32x our 2027E GAAP EPS of $10.38.

• Retail advertising growing fast and gaining wallet share. Retail media is Quarterly Forecasts (FYE Dec)

one of the fastest growing online ad verticals & represents an estimated ~20% Adj. EPS ($)

of US online ad spend ($65B+), and the advertising opportunity for AMZN 2025A 2026E 2027E

remains significant across both revenue & as a margin tailwind. The US online Q1 1.96 3.20A

advertising market represents a $335B+ TAM, of which retail & CPG comprise Q2 2.31 2.40

Q3 2.67 2.45

an estimated ~42% of spend (~$140B+). Google & Meta Platforms are the Q4 2.51 2.85