From Nasdaq: 2025-06-18 12:04:00

Disney’s partnership with Amazon Ads aims to enhance ad targeting and revenue optimization. The deal grants Amazon DSP direct access to premium inventory across Disney+, ESPN, and Hulu platforms. While the collaboration promises improved ad capabilities, meaningful revenue contributions are not expected until fiscal 2026.

The Amazon partnership addresses a critical need for Disney in maximizing ad-supported streaming revenues. Leveraging Amazon’s commerce data offers sophisticated targeting options to advertisers, potentially reducing ad frequency for consumers. Despite the positive outlook, Disney faces competitive pressures in the streaming landscape from players like Netflix, Amazon Prime Video, and Apple TV+.

Disney’s strong second-quarter fiscal 2025 performance showcased revenue growth and improved operating income in the Entertainment segment. The company’s streaming business continues to grow, with over 180 million Disney+ and Hulu subscriptions. However, the traditional linear television business faces challenges, with international parks experiencing softness.

Disney’s valuation reflects mixed fundamentals, trading at a discount compared to the Media Conglomerates industry average. Investors should consider the ongoing transformation challenges facing traditional media companies when evaluating Disney’s stock. While the Amazon partnership is a positive step, prospective investors may benefit from waiting for a better entry point.

The Amazon partnership represents a positive evolution for Disney’s advertising business. Current shareholders can hold positions given Disney’s strong brand portfolio and improving streaming economics. However, prospective investors may want to wait for fiscal 2026 to see the benefits of the partnership and strategic initiatives in financial results. Disney currently carries a Zacks Rank #3 (Hold).



Read more at Nasdaq: Disney’s New Amazon Deal: Does Ad Targeting Upgrade Justify a Buy?