Although the Amazon is yet to pay a single dividend since it went public in 1997, the Amazon share price continues to outperform the market year-on-year. In fact, in 2020 alone Amazon shares grew by over 75%, which was followed up by another positive return in 2021.
In this guide, we show you how you can buy Amazon shares UK. We will also discuss the UK stock apps that offer Amazon shares.
Although Amazon (AMZN), formally Amazon.com Inc., has a global presence, as a United States-based company its shares are listed on the NASDAQ exchange.
This is an exchange that hosts the largest tech stocks in the world – including Google, Microsoft, Facebook, and Netflix, to name a few.
As such, you’ll need to ensure that your chosen UK stock trading app gives you access to the NASDAQ in a cost-effective way.
Below we have listed two share dealing platforms in particular that allow you to buy Amazon shares in the UK.
As you might well know, a lot of stock apps in the UK will charge you a premium to access international shares like Amazon. This usually comes in the form of an FX fee that you need to pay in addition to the broker’s standard share dealing charge.
But, in the case of eToro – the app does not charge a single penny in commission when you invest in the stock market. This is the case for all 2,000 shares that it lists across 17 supported exchanges. In particular, this means that you can invest in Amazon UK on a commission-free basis. Additionally, eToro is well suited for smaller budgets.
This is because the platform supports ‘fractional shares’. Put simply, instead of needing to fork out over $3000 on a single Amazon stock, eToro allows you to invest from just $10 (£7.70) per trade. This is one of the many reasons why more than 24 million investors have since joined the eToro platform.
Once you have made your Amazon share purchase, you might be interested in adding other assets to your portfolio. If this is the case, eToro offers everything from ETFs and commodities to forex and cryptocurrencies like Bitcoin. Again, all of these assets can be traded in a cost-effective manner.
Alternatively, if you’re suited for a passive investment journey, eToro offers a popular Copy Trader feature. All you need to do is select a trader that you like the look of, decide how much you wish to invest (minimum $200), and all of the trader’s positions will be copied like-for-like. There are also CopyPortfolios, which are diversified investment strategies managed by eToro that have no management fees attached.
If you’re ready to buy Amazon shares from eToro right now, you can instantly deposit funds from as little as $10 (£7.70) with a UK debit card, credit card, or an e-wallet. We should also note that eToro is heavily regulated – including that all-important license with the FCA. Additionally, your eToro funds are covered by the FSCS.
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Once you have decided which stock app you want to use – and whether you want to buy or trade Amazon shares, it’s then time to do a bit of research.
After all, even though Amazon’s share price is up over 212% in the past five years, it doesn’t mean that the stocks will continue to rise indefinitely.
As such, the sections below will outline some key information that traders often take into account before you invest in Amazon UK.
Past performance is not an indication of future price.
Had you shared the vision of Jeff Bezos back in 1997 when Amazon first went public, you would now be looking at unprecedented gains. Back then, the shares would have cost you just $18 each. However, we need to adjust this future to take into account the many stock-splits that Amazon has initiated. As such, the initial Amazon share price UK was effectively just $1.73.
Fast forward to April 2022 and the same Amazon shares will cost you over $2880 each. That works out at end-to-end gains of over 166,000%. In simple terms, had you invested £1,000 into Amazon back in 1997, your investment would now be worth over £1.6 million. However, it’s not always been smooth-sailing for Amazon shares.
On the contrary, the stock was heavily impacted by the Dot Com bubble of the early 2000s. In fact, it took over a decade just for Amazon shares to get back to pre-bubble levels. But, as we now know, it’s been up, up, and away ever since. In more recent times, it goes without saying that Amazon benefited from the coronavirus pandemic.
While most of its divisions and subsidiaries performed well in 2020, it was its core retail platform that smashed through market expectations. In turn, Amazon shares started the year at $1,900 each – representing a 12-month increase of 75%. All in all, this means that Amazon is now a multi-trillion dollar company.
Since the pandemic, Amazon has gone from strength to strength, diversifying into various high-growth markets. One of the most exciting elements of Amazon’s ongoing strategy is within the flourishing cloud-computing sector, where Amazon holds the largest market share through the company’s Amazon Web Services (AWS) division.
According to Yahoo Finance, this market is expected to be valued at $947 billion by 2026 – more than double its 2021 value. This highlights the vast growth opportunity that Amazon has here, which is bolstered by its e-commerce and streaming segments.
When you think about the characteristics that a company needs to pay its shareholders dividends, Amazon possesses them all. This includes a long-standing listing on a major stock exchange, continued growth, market dominance, and of course, billions of dollars worth of cash on hand.
However, you might be surprised that to this date ,Amazon is yet to pay a single penny in dividends. This is the case with other so-called FAANG stocks such as Facebook, Netflix, and Google. This isn’t uncommon for high-growth companies to opt not to pay a dividend, as they tend to reinvest profits to provide further growth. However, this does mean that any gains you make from Amazon shares will come through share price increases.
As per its most recent annual report for Q3 2022, Amazon has an earnings-per-share (EPS) of $0.08. This easily beat analyst expectations, prompting a boost in the share price.
At the time of writing, Amazon stocks carry a price-to-earnings (P/E) ratio of 45.78. Ordinarily, a P/E ratio this high would indicate that investors are overly focused on the ‘potential’ of Amazon as opposed to what revenues it is generating right now.
With that said, above-average P/E ratios seem to be accepted now when it comes to tech-oriented stocks listed on the NASDAQ.
So now that we have covered the Amazon share price UK history, dividend policy, and key account ratios – we now need to look at the fundamentals. Amazon is widely considered one of the most popular stocks, but why is this?
Below you will find some of the most important factors, including past performance, volatility and future outlook, that people often use to determine whether Amazon shares are a buy or sell.
Seasoned investors will always contemplate how likely it is for a stock to defend its self to a wider recession or economic downturn. In this sense, risk-averse investors will usually add ‘defensive stocks’ to their portfolio during times of uncertainty. This usually centres on stocks operating in stable industries – such as pharmaceuticals, retail, or tobacco.
However, in recent years it was tech stocks like Amazon that led the way. After all, while most stock sectors saw huge losses back in 2020 due to the pandemic, Amazon thrived. In fact, as we noted earlier, Amazon stocks finished the year 75% up. This price increase can be attributed to Amazon’s stellar business model and focus on e-commerce, which was appealing to consumers who were forced to stay inside during the lockdowns.
An inexperienced investor will often make the mistake of focusing exclusively on Amazon’s e-commerce division. Sure, online retail makes up the vast bulk of its revenues.
However, other divisions are slowly but surely eating away at this dominance. At the forefront of this is the various service-based subsidiaries that fall under the Amazon brand.
For example, Amazon Prime subscriptions continue to rise, as does the content streaming service of the same name. As noted earlier, you also have Amazon Web Services (AWS), which is by far the largest player in the cloud computing arena. We should also mention other up-and-coming Amazon divisions that are likely to thrive in the near future, such as groceries, drone deliveries, and AI.
Irrespective of whether or not you think Amazon shares are a buy, there is no getting away from the fact that the firm possesses a considerably strong balance sheet. This shouldn’t be discounted, as the balance sheet is what allows organisations to weather the storm of prolonged economic downturns.
In the case of Amazon, the tech stock was sitting on over $96 billion in cash at the end of 2021. Plus, with the firm not tied to a dividend policy of any sort, this means that it can use its vast cash balance to fund new ventures.
This is especially important, as Amazon is invested in a wide range of cutting-edge technologies which naturally, will burn through cash until the product or service is financially marketable.
Perhaps one of the biggest threats facing Amazon stocks at present is that several key regulators could prove problematic for the firm. For example, the European Commission officially opened a case against Amazon in April 2022 to determine whether the company was in violation of antitrust laws.
In turn, the biggest fear for shareholders is that this could lead to several key changes in how Amazon is allowed to run its business. You then need to look at U.S. President Joe Biden’s plan to raise the corporate tax rate in 2023. This would have a huge impact on Amazon’s bottom line – meaning less free cash flow available for reinvestment.
So now that we have discussed the ins and outs of what to consider before you invest in Amazon, we are now going to show you how to complete your share purchase online.
The steps below will walk you through the typical process with a FCA regulated stock trading platform.
So, head over to a regulated broker and open an account. This requires some personal information from you, such as your name, address, date of birth, etc.
To verify your account and thus remove withdrawal restrictions, upload a copy of the following two documents:
Now it’s time to make a deposit.
You can instantly deposit funds at most brokers with the following payment methods:
Once your deposit has been processed, you can then buy Amazon shares.
Enter “Amazon” into the search box and click on the ‘Trade’ button.
Then, you will need to fill out a basic order form, like the image below.
All you need to do here is enter your stake.
To complete your Amazon share purchase, click on the ‘Open Trade’ button.
Before rounding off this guide, let’s take a quick look at the latest Amazon shares news for the week beginning May 29th, 2023:
This guide has walked you through the process of how to buy Amazon shares online in the UK. While one of the most popular stocks to buy, remember to do lots of research and weigh up the risks if you’re considering investing in Amazon shares.
Amazon became a public company in 1997 when it was listed on the NASDAQ exchange. The shares were initially listed at $18 each. But, when you factor in the several stock-splits that Amazon has since initiated, its IPO price actually stands at $1.73!
You certainly can, as most stock apps in the UK now give you access to the NASDAQ. However, you need to keep an eye on trading fees and commissions, as a lot of stock apps will charge a premium to buy non-stocks.
No, like a lot of FAANG stocks, Amazon does not pay dividends. It has no plans to change its dividend policy any time soon, so your ability to make money will come from an increased stock price.
The cheapest way to buy Amazon shares in the UK is to use a 0% commission stock broker.
Much like any stocks, the price of Amazon shares will go up and down throughout the day. At the time of writing in April 2022, one Amazon stock will cost you over $2800. However, by using a fractional share app like eToro, you can invest from just $10 (£7.70).
Kane Pepi is a British researcher and writer that specializes in finance, financial crime, and blockchain technology. Now based in Malta, Kane writes for a number of platforms in the online domain. In particular, Kane is skilled at explaining complex financial subjects in a user-friendly manner. Kane has also written for websites such as MoneyCheck, the Motley Fool, InsideBitcoins, Blockonomi, Learnbonds, and the Malta Association of Compliance Officers.