Launched in 1994 in the midst of the dot com bubble, Amazon is an online retailer with a market capitalization of just under $1 trillion. Alongside Facebook, Apple, and Google it forms part of the ‘Big Four’ tech stocks.
Collectively, these four companies have a major influence on the NASDAQ stock exchange, which is where Amazon shares are listed.
Interested in buying Amazon stock today but not sure where to start? In this article, we discuss some of the best online stockbrokers that allow you to invest at the click of a button.
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Where to Buy Amazon Stock
If you want to buy Amazon stock from the comfort of your own home you will need to use a stock trading brokerage. Not only does the account registration process take minutes, but most of these brokerages support a wide range of payment processors. Online stock brokers also allow you to buy partial Amazon shares that allow you to buy as little or as much as you like.
That said, there are hundreds of brokers that allow you to invest in Amazon, so we’ve narrowed our recommended platforms down to these three:
Detailed Provider Review
1. eToro – Best Stock Broker for Worldwide Customers
eToro is an online stock broker that gives you access to a wide range of US and international shares and stocks. This includes NASDAQ, the exchange where Amazon is listed on. Opening an account with eToro takes just minutes, and you can verify your identity automatically by uploading a clear copy of your passport or driver's license. Once you do, eToro allows you to deposit funds with a debit/credit card, e-wallet, or bank transfer.
The online stock broker is perfect for newbie traders, as you don't need to have any experience in buying shares to get started. The platform also provides a useful educational department, which features a step-by-step guide on how to buy shares. eToro fees and spreads are also super competitive and doesn't charge any commissions. Instead, the only fees you need to be made aware of is the spread.
As long as you avoid applying leverage to your trade, you will own Amazon stock outright. There's no need to buy whole shares with eToro, so you can get started with really small amounts. You will, however, need to meet a $200 minimum deposit amount.
eToro is regulated by several tier-one licensing bodies that include FCA in the UK and CySEC in Cyprus.
- Catered to newbie traders
- 0% commission on ETFs and stocks
- Supports heaps of everyday payment methods
- Minimum withdrawal of $50
- High spreads
- MT4/5 not available
2. Plus500 – Trade Amazon Stock at competitive spreads
Plus500 is a UK-based online broker that gives you access to numerous stocks and shares. However, unlike the traditional stock exchange, you will be investing in CFD stocks, meaning that you do not own the asset. This shouldn't be an issue per-say, as Amazon does not pay dividends, so you are not missing out. CFDs allow you to invest in Amazon in a cost-effective manner, and it also gives you the option of short-selling.
Additionally, Plus500 is a commission-free broker, and you only have to pay the spreads. The spreads vary throughout the day, so make sure you only trade during standard market hours to keep this to a minimum. Plus500 is authorized and regulated by FCA in the UK and several other tier-one licensing bodies - including CySEC and ASIC. Its parent company is listed on the London Stock Exchange, which adds weight to the platform's reputation as a trusted broker.
Plus500 accepts debit and credit cards, PayPal, and a bank transfer. The minimum initial deposit for account activation is $100, and unless it's a bank wire, the deposit is processed instantly. There are no fees to deposit or withdraw funds at Plus500. Plus500 is, however, light in the educational and research materials. Its sophisticated nature and the complexity of CFD trading also make it more adapted for the experienced online share and stock traders.
- Fast order execution
- Commission-free stock trades
- Tight spreads
- Stocks only available via CFDs
- Charges overnight funding and inactivity fees
3. Stash Invest – Best USA Broker With Low Deposits
Stash Invest is a mobile-based stockbroker with its headquarters in the US. The platform specializes exclusively in American-listed assets, so you'll have no issues buying Amazon stock. This particular platform is ideal if you want to invest small amounts.
This is because Stash allows you to get started from just $5, and you can buy fractional stocks. When it comes to fees, Stash offers a number of account options. The basic account costs just $1 per month, and if you want full access to all of its features, this cost goes up to $9.
Regardless of what account option you go for, you will only be able to deposit funds by linking Stash Invest with your checking account. Debit/credit cards or e-wallets are not supported. Stash Invest also comes with a handy debit card if you plan to make withdrawals from your account.
- $5 minimum deposit
- Allows fractional stock purchases
- Monthly fee from just $1
- Limited number of shares hosted
- No access to international stock exchanges
How to Buy Amazon Stock
Below we have outlined a handy guide on how you can use the platform to buy Amazon stock.
Step 1: Search for Amazon (AAPL) Stock
Trading platforms list thousands of tradable financial instruments on its site, so you’ll need to locate the NASDAQ marketplace and find Amazon. To get started, search for Amazon in the search box at the top of the page, and click on the corresponding result.
Step 2: Click on ‘Trade’
You will now need to click on the ‘Trade’ button, which will then populate the order form.
Step 3: Set-Up Order and Buy Amazon Stock
On the pop-up buy/sell window, set up your trade parameters.
Read through the following bullet points carefully to place your Amazon trade:
- Amount: You need to enter the amount of Amazon stock that you wish to buy, and NOT the number of individual shares. For example, if you want to purchase $200 worth of stocks, this is the amount that you need to enter.
- Set Rate: You are given the option of taking the next available market price (market order), or choosing your own entry point (limit order). If its the latter, enter the price that you wish the trade to be placed at.
- Stop Loss: It’s super-important that you choose a stop-loss amount, as this will protect you in the event the markets move the wrong way. Enter the price that you want your Amazon stock to be closed automatically.
- Take Profit: If you have a particular stock price target in mind, you can set up a take-profit order. If this level is gets triggered, your Amazon stock will be sold automatically.
Finally, click on ‘Buy’ to complete your order.
Why Do People Invest in Amazon?
You should always perform your own in-depth research on a stock prior to making an investment, below we have listed some of the main reasons that Amazon might represent a viable addition to your portfolio.
All-Out on Capital Gains
Although Amazon went public back in 1997, still to this day it does not pay its shareholders any dividends. This is highly usual, especially considering the success Amazon has experienced over the past two decades. While this won’t appeal to those of you that are seeking passive income, it will attract investors that are focused on long-term capital gain growth. Amazon knows that it needs to continue to grow year-on-year if it wishes to keep shareholders happy.
Amazon Continues to Diversify
While retail still sits at the core of Amazon’s product range, the company has diversified into heaps of other markets. For example, Amazon recently completed the acquisition of Whole Foods Markets valued at $13.4 billion. This is to spearhead the company’s transition into the food and grocery delivery sector. These are an addition to its transportation and cloud computing, Amazon is also increasing its market share in the online video content space.
Revenue and Growth is Growing Year-on-Year
When it comes to the fundamentals, Amazon reported huge revenues of $280 billion in 2019, a ‘mere’ increase of 20% from the prior fiscal year. Most recently, Amazon reported earnings of $6.47 per share in the fourth quarter of 2019, smashing through the market’s forecast of $4.05. These successes in the fundamentals have resulted in an upward trajectory of Amazon’s stock price.
Amazon Web Services (AWS) Dominates the Cloud Space
At the forefront of this are Amazon and its AWS subsidiary. The company saw sales of $3.2 billion from its AWS venture last year, which represents a year-on-year increase of 19%. This figure is estimated to grow by a further 18.5% in 2020.
About Amazon Stock
Company and Stock history
Amazon was founded in 1994 by Jezz Bezos, who still drives the ship as the company’s CEO. When it started, Amazon featured exclusively as an online book store. It then grew into other consumer products like CDs, DVDs, and video games. Due to loose digital tax laws at the time, this allowed Amazon to undercut its offline competitors.
Rapid growth allowed Bezos to go public just three years after the company was formed. Amazon opted for the tech-oriented NASDAQ stock exchange, with the IPO pricing stocks at just $18 per share. Fast forward to 2020 and the stock hit an all-time high price of $2,134. This represents an increase of 11,755% from its original stock price.
It is important to note that Amazon was one of the hardest hit during the dot com stock market crash of the early 2000s. In fact, the company lost more than 90% of its value in the proceeding years. Although it took more than 15 years for Amazon to recover its pre-crash highs, the company has been on an upward trajectory ever since.
First and foremost, you need to remember that Amazon is a capital gains-only stock, meaning that you will not earn any dividends. As we briefly noted earlier, this is highly unusual for a blue-chip company of Amazon’s size, especially when you consider it first went public in 1997. This means that you will be relying heavily on Amazon to meet two key objections; diversification and year-on-year growth.
So, the company is arguably well positioned regarding its diversification strategy. It already has heaps of subsidiary projects on the go, most of which focus on innovation. This includes its expansion into the food and grocery markets, as well as pioneering the same-day delivery phenomenon through drones. You’ve also got Amazon’s cloud service domination to take into account, and plenty of cash reserves to make future acquisitions when the opportunity arises.
What this also means that that Amazon is becoming less and less reliant on its core online retail business. Online sales won’t continue to grow year-on-year indefinitely, so it’s notable that management is looking to diversify. And much like the rest of the Big Four tech stocks, Amazon’s share price gets hit hard during times of bearishness. If and when it does, you won’t have fixed-income dividends to fall back on.
In summary, had you taken the plunge back in 1997 and purchased Amazon stock when the company first went public, you’d be staring at gains of almost 12,000%. With the company sitting on a market capitalization of just under $1 trillion.
This includes exposure to sectors such as the same-day drone space, grocery and food deliveries, and an ever-growing market share in the cloud computing scene. Just remember, Amazon still to this day has not paid investors a single cent in dividends, so your one and only focus will be on capital gains. As of Nov 5, 2020, analysts are forecasting continued growth for Amazon, with a 12 month price target of $3,652.59 per share (an upside of +12.69%) for Amazon stock.
Glossary of Stocks Terms
A stock is a representation of a company’s equity. When a company wants to raise capital, it issues stocks to the public. It is the aggregation of the total stocks owned by one individual that inform their shareholding of the company.
A share is an indivisible unit of capital that expresses the ownership relationship between a shareholder and a particular company, mutual fund, REITs or limited partnership. A share indicates a portion of ownership (claim) that one has on a company or fund.
Dividend refers to the portion of the company’s profits that is distributed to its stockholders. It can be on a quarterly or annual basis.
A bull market is an economic condition where the stock markets are in an extended period of consistent increase in stock prices.
A stock market is said to be bearish if it is involved in extended periods of continuous price decrease of the stock prices.
A stock exchange is an institution or a platform where shares and stocks and a host of other money market instruments are traded.
The return on investment is the profit you make from trading in or investing in shares and stocks of a particular company. It often comes from selling the investment at a higher price than was originally bought or benefiting from dividends and other profit-sharing schemes as a result of owning and holding onto a particular investment.
A broker may be a person or entity that engages in the buying and selling of different types of investments on behalf of other individuals or entities at a fee (or commission).
Day Trading is the practice of buying a money market investment product and selling it as soon it reports price increase or loss, within the same day. Traders engaged in day trading are referred to as “day traders” or “active traders”
Arbitrage is the act of buying and selling security at different stock exchanges or markets with varying prices. If, for instance, stock ABC sells at $11 on one exchange and $11.75 on the other, arbitraging involves buying from at the low price exchange and profiting by selling it at the higher-priced exchange.
A stock index is a statistical measure of the change in the stock and securities market. It comprises a hypothetical portfolio of different companies whose change in prices is calculated to determine market performance.
The Initial Public Offering refers to the sale of company stock to the public for the first time. It is the act of taking a company public and is highly regulated by such financial regulators like the SEC in the USA and FCA in the UK.
Options are derivative financial instruments whose price is based on the value of their underlying tradable security like shares and stocks. They are contracts that give the holder an option to buy or sell the underlying asset at a later date. Unlike futures, an options contract holder has the choice to buy/sell or not.
This is an options contract that gives the holder an option to buy the underlying asset before the expiry date.
This option gives its holder the choice of selling the underlying asset before its expiry date
A mutual fund refers to a company that pools funds from different investors and invests these funds in stocks, bonds, and other financial market securities. They then distribute the capital gains from these invests to their members.
The process through which stocks for companies that are not listed with accredited stock exchanges like the NYSE are traded. It is a broker-dealer network for unlisted stocks for companies that do not meet listing requirements set by the organized exchanges.
A stock is said to be overbought if it is traded excessively over a short period of time and at unjustifiably high prices.
A stock is said to be oversold if it is consistently traded below its true value.
Also referred to as the offer or asking price, this refers to the lowest price that the seller will take for a stock.
Bid price refers to the maximum price that a buyer is willing to pay for a stock.
In the stock trading context, Volume refers to the number of shares that change hands within a given period of time, be it a day, month or annually. It is trading/investment indicator where rising trade volumes point to a healthy stock while dwindling volumes are indicators of investor pessimism towards a stock.
Refers to the statistical measure of the change in price of a stock over a given period of time. It is a measure of the rate and the time it takes for a stock price to move from high to low and how long it remains within a certain price range. The higher the volatility, the higher the risk.
This refers to the highest closing price recorded by a given stock in the last 52 weeks.
This refers to the lowest closing price that a particular stock recorded in the last 52 weeks.
The bid-ask spread refers to the difference between the lowest price that a seller is willing to take for their stock and the highest price that a buyer is willing pay for the stock. It is the difference between the quoted ask and bid prices.
A market order is an instruction by an investor to the broker or brokerage platform asking them to buy/sell a stock or any other security at the best price available at that moment. It is often issued when an investor wishes to enter or exit the market quickly and at the prevailing rates.
A limit order is an order that triggers a sale or buy when a predetermined or better price is met. For a buy limit order, the buy order is executed once the set limit price or a better price is triggered. The sell limit order on the hand triggers the sale of stocks if the limit price or better price is hit.
Also referred to as a stop loss order, it is an order that triggers a buy or sell action once a predetermined price level is hit. It is designed to help you minimize possible loss on a given trade should the markets move against your bet.
Take profit is a type of limit order dictating the price level at which the broker or brokerage platform is to close a trade for profit.
Capital gain refers to the value rise of a tradable financial instrument that makes its selling price higher than the buying price. It can also be referred to as the profit realized from liquidating a capital investment like stocks.
An ETF is a collection of many tradable instruments like bonds, stocks, and commodities. These are listed on the exchanges and traded like ordinary stocks.
The debt-to-equity (D/E) ratio is a financial ration tool used to measure the financial health of a company by gauging value of its equity in relation to debt. It is achieved by dividing the company’s total liabilities in relation to its shareholder’s equity.
This is an investment strategy where the investor only buy shares that have consistently paid out high dividends in the past or others with the fastest dividend rates. Dividend investing strategy advocates are more interested in how much a shares pays in dividends than its price fluctuations.
Growth stocks refers to the stocks of companies that are expected to grow at a faster rate than the industry average and report consistent and sustainable cashflows. The company sales and revenues are also expected to increase at a faster than that of an average company in the same industry.
These are also referred to as micro-cap or nano-cap stocks and refers to the stocks of relatively small companies valued less than $5 and only trade via the Over-The-Counter markets.
A blue chip refers to a nationally recognized and financially sound company with a long and stable record of consistent growth. It is company whose financial might and nature of operation make it well suited to face turmoil and remain profitable in the uncertain economic conditions..
Short selling is a trade/investment strategy where the investor is banking on the decline of the shares of a particular company. They therefore borrows these shares, sells them at the current market price and buys them back after they lose value, effectively profiting from the price difference.
Yield refers to the profit/earnings generated from investing in a particular stock or market instrument over a given period of time and is expressed a percentage of the stock’s market value, face value or as percentage of invested amounts.
Capital stock, also referred to outstanding shares, refers to all the regular shares issued by a company and held by all its shareholders including the restricted/locked-in shares held by company insiders, executives, and institutional investors. The number of capital stock is used in calculating key metrics including cash-flow per-share and earnings per share.
EPS refers to the monetary value, the profit or earnings attributable to each outstanding shares held by a company. It is a financial ratio that is arrived at by dividing the company’s profit by its outstanding shares of the common stock.
Also referred to as Price-to-earnings ratio, PER is a financial metrics tools used to check if a company’s shares are over/undervalued by dividing the shares current market price with its earnings-per-share.
A company’s flat refers to the number of regular shares issued to investors that are available for trading. The float shares figure is arrived at by subtracting the locked-in shares held by company insiders and executives from its capital stock.
Gap up stocks refer to company stocks that open the day trading at relatively higher prices than their previous day’s closing price. This is often attributed to the after-market trading activity.
Gap down stocks refers to company stocks that open the day trading at relatively lower prices that the previous day’s closing price. For instance if a company stock closes the day trading at $50 but opens the following day trading at $45, it is said to have a 5-point gap down.
Stock buyback, also referred to as share repurchase, occurs when a publicly listed corporation uses a part of its revenues to buy back its shares from the marketplace. The move effectively reduces the number of company shares in circulation, which translates to an increased share price.
HOLD is a financial recommendation issued by a qualified financial institutions or financial analyst advising investors/traders not to buy or sell a particular stock. It is a no-action situation where long position traders are advised not to sell and others investors advised not to buy into the stock.
This refers to the upper-most price level that a particular stock or any other security reaches but doesn’t exceed due to dwindling number of buyers and an increasing number of sellers.
Is a branch of economics that’s concerned with the study of how the economy and different large-scale markets are structured, how they behave, and how they perform.
Relative Strength Index is a technical momentum indicator used in market analysis to determine if a stock is overbought or oversold by measuring the magnitude of a recent bullish or bearish price run. It has a scale of 0-100 where RSI readings of 70+ indicate a stock is overbought while an RSI reading below 30 is an indicator of an oversold security.
Moving Averages is a statistical calculation that is specially designed to identify the arithmetic mean of a given number of data sets or range of prices calculated over a given period of time. Each of these data set or price range is created by the average/mean price for that subset. For instance, a single data point on a moving averages scale may represent the average stock price for a day or trading session.
Bollinger Bands are a technical indicator tool characterized by two statistical carts that run alongside each other indicating the changes in prices and volatility of a financial instrument like stock or commodity over a given period of time.
Fibonacci retracements refer to two horizontal lines that use the Fibonacci numbers to measure the percentage of price retracement in a bid to indicate where the resistance and support are most likely to occur.
How much were Amazon stock originally?
Amazon went public in 1997, with founder and CEO Jeff Bezos choosing to list the company on the NASDAQ exchange. The subsequent IPO saw Amazon shares sell at just $18. And today? The shares are worth just under the $2,000 mark.
How much cash is Amazon hoarding?
As per the company's year-end financial statements in 2019, Amazon was holding just over $55 billion in cash reserves.
Does Amazon pay dividends?
Amazon is one of the few multi-billion-dollar companies listed on the US stock markets that does not pay any dividends. Instead, investors are rewarded exclusively from capital gains.
Do I need to buy whole Amazon shares?
With Amazon stock hitting an all-time high of over $2,000 at points, this might make an investment out of reach for a many. Fortunately, there are now heaps of online stockbrokers that allow you to buy partial shares. As long as you meet the broker's minimum deposit amount, you can invest as little as you like!
What stock exchange are Amazon stocks listed on?
Alongside the likes of Google, Facebook, Microsoft, Netflix, and other Big Tech stocks, Amazon is listed on the NASDAQ exchange.
Why does Amazon buy its own shares?
Amazon has previously engaged in a share buyback scheme, which reduces the number of stocks in circulation. In turn, this increases the per-stock price for shareholders.
What is the symbol for Amazon stock on NASDAQ?
Apple utilizes the stock symbol 'AMZN'.
Can I short Amazon stock?
The only way that you will be able to short-sell Amazon stock is via a CFD broker. This means that you are speculating on the price of Amazon stock going down.
What market share does Amazon Web Services have in the cloud space?
Amazon Web Services leads the way in the ever-growing cloud space with a 2019 market share of 47.8%.