Step 1: Find a UK Stock App that Lists Amazon Shares UK
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 UK without breaking the bank.
1. eToro – Buy Amazon Shares UK with 0% Commission
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 across all 2,400 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 $3,000-ish on a single Amazon stock, eToro allows you to invest from just $50 per trade. This is one of the many reasons why more than 13 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, these assets can be purchased or traded commission-free.
Alternatively, if you’re suited for a passive investment journey, eToro offers a Copy Trading 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 thereon – all trades will be copied like-for-like. There are also CopyPortfolios, which are diversified investment strategies managed by eToro.
If you’re ready to buy Amazon shares from eToro right now, you can instantly deposit funds 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.
67% of retail investors lose money trading CFDs at this site.
2.Capital.com – Best UK Stock App to Trade Amazon CFDs
If you have a bit of experience in the online trading scene and wish to place more sophisticated positions – Capital.com is well worth a look. The regulated stock app focuses purely on CFDs – meaning that you can trade stocks without needing to take ownership.
In taking this route, you can trade Amazon shares with leverage. This means that by applying the maximum ratio of 1:5, you can trade Amazon with five times the amount of capital that you have in your account. Furthermore, Capital.com offers long and short markets on Amazon. This means that you can speculate whether you think the Amazon share price UK will rise or fall.
An additional benefit of trading Amazon CFDs at Capital.com is that you will benefit from industry-leading fees. Much like eToro, the trading app does not charge any commissions. Spreads are really tight too – especially on large-cap stocks like Amazon. This is useful for those of you that come from a day trading or swing trading background.
In terms of the specifics, Capital.com only requires a minimum deposit of £20 when using a UK debit/credit card or e-wallet. If you insist on opting for a bank account transfer, the minimum increases to £250. Nevertheless, Capital.com is safe and secure as it is authorized and regulated by the FCA.
There is no guarantee you will make money with this provider.
Step 2: Is Amazon a Good Investment?
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, just because Amazon made gains of 75% in 2020 – it doesn’t mean that the stocks will continue to rise indefinitely.
As such, the sections below will outline some key information that you need to take into account before you invest in Amazon UK.
Amazon Share Price UK Action
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 early 2021 and the same Amazon shares will cost you over $3,200 each. That works out at end-to-end gains of over 184,000%. In simple terms, had you invested £1,000 into Amazon back in 1997, you would now be worth £1.8 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.
Does Amazon Pay Dividends?
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 still 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. As such, all of your potential earnings are going to come from an increased Amazon share price.
Amazon EPS and P/E Ratios
As per its most recent annual report, Amazon has an earnings-per-share (EPS) of $23.01. This is up from $20.14 the prior year, and significantly higher than its $6.15 EPS of 2017.
At the time of writing, Amazon stocks carry a price-to-earnings (P/E) ratio of 94. As you might have guessed, this is huge.
Ordinarily, this 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.
Should I Buy Amazon Shares?
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 best stocks to buy, but what makes it such an attractive investment?
Below you will find some of the most important factors, including past performance, volatility and future outlook, that might determine whether Amazon shares are a buy or sell.
Amazon has Shown That it is Immune to the Covid Pandemic
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 centers on stocks operating in stable industries – such as pharmaceuticals, retail, or tobacco.
However, this time, it was tech stocks like Amazon that led the way. After all, while most stock sectors saw huge losses in 2020 because of the pandemic, Amazon thrived. In fact, as we noted earlier, Amazon stocks finished the year 75% up. This is great news for those that are worried about extended lockdown measures and are wondering where to put their capital.
Services Divisions are Doing Really Well
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. You then 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 strive in the near future – such as groceries, drone deliveries, and AI.
Strong and Stable Balance Sheet
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 organizations to weather the storm of prolonged economic downturns.
In the case of Amazon, the tech stock was sitting on over $49 billion in cash reserves last year. 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 full range of cutting-edge technologies which naturally, will burn through cash until the product or service is financially marketable.
Regulators are a Potential Chink in the Armor
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 US House Judiciary Committee recently determined that Amazon is a monopoly in the domestic marketplace.
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. In addition, authorities in Europe are also looking to hit Amazon with anti-trust charges.
You then need to look at newly elected President Joe Biden’s plan to raise the corporate tax rate. This would have a huge impact on Amazon’s bottom line – meaning less free cash flow available for reinvestment.
Amazon Shares Buy or Sell?
Taking all of the above into account – you might be wondering whether Amazon shares are a buy or sell. Put simply, you will struggle to find a Wall Street analyst that is bearish on Amazon. Sure, the tech stock does carry a considerable P/E ratio. But, there is just too much to like about this ever-growing innovator.
Step 3: How to Buy Amazon Shares UK
So now that we have discussed the ins and outs of what to consider before investing in Amazon, we are now going to show you how to complete your share purchase online.
The steps below will walk you through the process with eToro – as the FCA trading platform allows you to invest in Amazon in the UK commission-free, at a minimum of just $50.
Open a Brokerage Account and Add Funds
So, head over to the eToro homepage 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:
Passport or Driver’s License
Recent Utility Bill or Bank Account Statement
Note: You can upload these documents later as long as you are not planning to buy more than $2,250 worth of Amazon shares.
Now it’s time to make a deposit – which needs to be at least $200.
You can instantly deposit funds at eToro with the following payment methods:
Step 4: Invest in Amazon UK
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 in US dollars. Once again, the minimum is $50.
To complete your commission-free Amazon share purchase, click on the ‘Open Trade’ button. If buying the shares outside of standard market hours, the button will display “Set Order”.
How to Buy Amazon Shares UK – The Verdict
This guide has walked you through the process of investing in Amazon online in the UK. We concluded that eToro is the best option on the table for this purpose, as you can buy Amazon shares without paying any commission, and the end-to-end process takes just minutes. Plus, the FCA stock app allows you to invest from just $50 per trade.
67% of retail investor accounts lose money when trading CFDs with this provider.
When did Amazon first go public?
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!
Can you buy Amazon shares in the UK?
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.
Does Amazon pay dividends?
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.
What is the cheapest way to buy Amazon shares in the UK?
The cheapest way to buy Amazon shares in the UK is to use eToro. This is because the FCA broker allows you to invest in international stocks on a commission-free basis.
How much are Amazon shares?
Much like any stocks, the price of Amazon shares will go up and down throughout the day. At the time of writing in early 2021, one Amazon stock will cost you over $3,200. However, by using a fractional share app like eToro, you can invest from just $50.