Take Advantage of Amazon’s Hidden Growth Story Wall Street Ignored

By Rich Duprey Published Aug 2, 7:39AM EDT

Key Points in This Article:

Amazon (AMZN) got knocked back on Friday after reporting AWS revenue growth that failed to wow the market.
However, advertising revenue grew 23%, outpacing competitors and marking the fastest growth in five quarters.
Strategic integrations with Roku and Disney’s DSP position further position AMZN as a leader in connected-TV advertising.

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Take Advantage of Amazon’s Hidden Growth Story Wall Street Ignored — © Atichat Wattanasin Stone / Shutterstock.com

A Market Misstep and a Buying Opportunity?

Amazon’s (NASDAQ:AMZN | AMZN Price Prediction) latest quarterly report delivered a mixed bag that sent its stock tumbling 8.3% on Friday. Despite exceeding expectations with strong earnings and revenue, the market fixated on a perceived slowdown in Amazon Web Services (AWS), where sales growth didn’t accelerate as hoped.

AWS, a cornerstone of Amazon’s profitability, grew steadily but lacked the explosive uptick investors craved. The reaction felt swift and harsh, overshadowing the company’s broader strengths.

While headlines screamed caution, a deeper dive into the numbers reveals a different story — one of untapped potential in an overlooked segment. The market’s focus on AWS may have blinded it to Amazon’s true growth engine. At its newly discounted price, this a golden opportunity for investors to snag a powerhouse at a bargain. Here’s the hidden rocket fuel powering Amazon’s future.

Advertising: The Unsung Hero

While AWS often steals the spotlight, Amazon’s advertising business is quietly becoming a juggernaut. In the latest quarter, ad revenue surged 23% to $15.7 billion, marking its fastest growth in five quarters. This outpaced competitors like Meta Platforms (NASDAQ:META) and YouTube, cementing Amazon’s dominance in digital advertising.

The e-commerce giant’s vast trove of consumer data allows it to deliver hyper-targeted ads, making it a magnet for brands. Unlike traditional platforms, Amazon’s ads are seamlessly integrated into its shopping ecosystem, driving conversions at a rate rivals can’t match.

Where Meta uses its broad user base to grow ad revenue, it’s more of a shotgun approach and hopes an ad hits, even with the use of artificial intelligence. Similarly, YouTube’s ads detract from the user experience than add to it. How often does your finger hover over the screen waiting for the “skip” button to appear when minute-long ad breaks pop up?.

Amazon’s advertising segment, about half the size of AWS, is growing at a blistering pace and boasts high margins. With e-commerce penetration still rising globally, Amazon’s ad business is poised to scale further, fueled by its unmatched ability to connect brands directly to consumers at the point of purchase.

Connected TV: The Next Frontier

Amazon’s advertising prowess extends beyond its e-commerce platform into the booming connected-TV (CTV) market. New integrations with Roku (NASDAQ:ROKU) and Disney’s (NYSE:DIS) demand-side platform (DSP) have positioned Amazon as a leader in CTV advertising.

These partnerships expand Amazon’s reach into millions of living rooms, where streaming is reshaping how consumers engage with content. The company’s Fire TV platform and Prime Video already command a massive audience, and its ad tech enables precise targeting that rivals like Meta can’t replicate in the CTV space.

As streaming continues to overtake traditional TV, Amazon’s early mover advantage and robust infrastructure make it the go-to platform for advertisers. This strategic push into CTV not only diversifies Amazon’s ad revenue but also strengthens its ecosystem, creating a virtuous cycle of content, engagement, and monetization.

Key Takeaways

Investors often get caught up in headlines, but the real edge lies in digging deeper. Amazon’s AWS, while critical, isn’t its only growth lever. The market’s fixation on AWS’s steady — but not spectacular — growth ignored the 23% surge in ad revenue and Amazon’s leadership in the fast-growing CTV ad market.

These hidden gems reveal a company with multiple paths to sustained growth. Amazon’s massive scale makes maintaining sky-high growth rates across all segments challenging, but its diversified portfolio ensures resilience.

The recent 8.3% stock drop, driven by short-term noise, has created an attractive entry point for long-term investors. By focusing on the bigger picture — advertising’s meteoric rise and CTV’s potential — investors can see Amazon’s true value.

More often than not, ignoring the headlines and diving into the financials uncovers opportunities the market overlooks. At its current price, AMZN stock remains a compelling buy.

About the Author Rich Duprey →

After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, and Money Morning. He has been interviewed for both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.