• by Laurie Sullivan , Yesterday

Amazon reported strong growth in its advertising business for the first quarter of 2026, with ad revenue reaching $17.2 billion -- up 22% year-on-year.

The company attributed the advertising momentum to agentic commerce and AI-driven ad creative tools, with participation trends in small and medium-sized businesses.

AI tools like Rufus, an agentic chatbot for consumers, and Creative Agent for advertisers that can plan and execute the creative workflow -- as well as full-funnel offerings and expansion into partnerships with Netflix, Comcast and Samsung -- also contributed to the rise in revenue.

Amazon Rufus monthly active users rose 115%, with engagement up 400% year-over-year.

“We continue working to be the best place for brands of all sizes to grow their businesses,” Amazon CEO Andy Jassy said during the earnings call.

Advertising has become a key growth driver for the company, along with AI advertising solutions that improve engagement between brands and consumers.

The company has generated about $70 billion from its advertising business during the past 12 months.

“On agentic commerce and how that impacts advertising, I actually believe we are going to like this for advertising,” Jassy said. “I think it is going to be good for customers and good for our business.”

Jassy highlighted the way the ads team builds tools and agents to make it easier to create and run ads. While it once took weeks to months to build a creative and pick the correct audience, all that is done much quicker because of agentic, even in a “multi-turn experience” where there are many stops and starts in the process.

Agentic commerce, Jassy said, “gives rise to opportunities like sponsored prompts.”

While Amazon works with third-party agents that are intended to work across platforms, Jassy said, “I do think today it reminds me in some ways of what we saw in the early days of search engines and their trying to refer business to ecommerce.”

Amazon posted revenue of $181.5 billion in the first quarter, up 17% from $155.7 billion a year earlier.

Amazon Web Services (AWS) generated 28% higher revenue this quarter, $37.6 billion, compared with the year ago.

Operating income for the quarter increased to $23.9 billion, compared with $18.4 billion in the same period last year.