Amazon’s Dual Transformation: Logistics for Hire and a $70 Billion Ad Machine

Amazon opens its logistics network to third parties while its ad business hits $70B in revenue, boosting margins and investment capacity.

Amazon is rewriting its profit playbook on two fronts. The e-commerce titan is opening its sprawling logistics network to third-party companies that do not even sell on its marketplace, while simultaneously cementing its position as one of the world’s largest advertising platforms – a business that generated $70 billion in revenue over the past twelve months. Both moves target higher margins and deeper moats in Amazon’s core North American market.

The logistics pivot, dubbed Amazon Supply Chain Services, lets external firms tap the company’s freight and distribution centres without listing products on Amazon.com. TD Cowen analyst John Blackledge described the shift as a “massive expansion” of Amazon’s logistics business and expects a clear boost to earnings. The investment bank reaffirmed its buy rating with a $350 price target.

At the same time, Amazon’s advertising engine is firing on all cylinders. The company now reaches 300 million ad-supported consumers in the United States, a scale that dwarfs traditional TV networks. In the first quarter alone, ad revenue jumped 24% year-over-year. Amazon is no longer confining those ads to its own ecosystem: its demand-side platform now places campaigns on rivals’ turf including Netflix, Disney+ and Spotify, making the ad business a high-margin centre of gravity.

Faster Deliveries as a Competitive Weapon

The logistics overhaul comes alongside record-breaking speed in consumer delivery. Amazon Now, the ultra-fast grocery and household goods service, promises delivery in under 30 minutes. Last year, Amazon shipped more than 13 billion packages worldwide on the same day or the day after. In the United States, that rapid-delivery volume surged more than 30%.

These operational gains feed directly into the advertising strategy. Every delivery touchpoint – from app notifications to doorstep packaging – becomes an additional ad surface, reinforcing the flywheel between logistics efficiency and ad monetisation.

Content Arsenal Fuels Premium Advertising

Amazon’s ad push is underpinned by a growing content library. At its recent Upfront presentation in New York, the company unveiled new ad formats including Dynamic TV Creative, which uses artificial intelligence to tailor interactive video spots to individual Prime Video viewers’ shopping habits.

The content pipeline is equally ambitious. The next season of The Lord of the Rings: The Rings of Power is scheduled for November 11, 2026. Amazon has also greenlit a series adaptation of the bestseller Fourth Wing and ordered more episodes of hits like Reacher. In sports, Prime Video secured another season of exclusive NFL coverage, keeping live events at the heart of its ad inventory.

Record Capex Backed by High-Margin Revenue

The strength of advertising flows directly into Amazon’s investment capacity. After a strong start to the year that produced a net profit of more than $30 billion, the company plans to spend roughly $200 billion in 2026 – largely on data centres and AI infrastructure. That spending addresses the capacity constraints squeezing AWS, its cloud division.

Advertising serves as a lucrative buffer, funding the capex boom while AWS remains the technological backbone. The high-margin ad business not only supports margins but also gives Amazon the financial flexibility to outspend competitors on artificial intelligence and cloud expansion.

Stock Holds Near Highs as Technicals Stay Firm

Investors have rewarded the strategy. Amazon shares closed at €226.45 on Tuesday, up roughly 17% since the start of the year. The stock has pulled back about 3% from its 52-week high, but the underlying uptrend remains intact. Technically, the shares trade comfortably above their 50-day moving average of €199.19. That short-term line recently broke above the long-term trend, a bullish configuration analysts watch closely. As long as the stock defends that level, the upward trajectory is expected to continue.