How to Invest in Amazon (AMZN)

Investing in Amazon means buying shares in one of the largest and most recognisable companies in the world. As a publicly listed company on the NASDAQ stock exchange, investors can buy shares in Amazon through brokers which offer access to the US markets. 

To invest in Amazon, investors will need to open an investing account, deposit funds, search for AMZN and place a buy order. However, understanding the business behind the stock takes a little more work which is worth doing before you invest. This guide takes an in-depth look at the e-commerce giant, explains how to invest in Amazon step by step and what to consider before doing so.

The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.

What Is Amazon? 

Amazon was founded by Jeff Bezos in 1994, initially operating out of his garage in Bellevue, Washington. What began as an online bookstore has since expanded into a sprawling technology giant, spanning e-commerce, cloud computing, digital advertising, artificial intelligence and entertainment. 

Today, Amazon is one of the largest companies in the world by market capitalisation, trading above $2 trillion. It employs more than 1.5 million people worldwide and serves hundreds of millions of customers across more than 20 countries. 

How Amazon Makes Money

Amazon is often described as an e-commerce company. Whilst that's largely true, the label significantly understates the breadth of its business, which generates revenue from several different segments. 

E-Commerce and Third-Party Sellers

Amazon's retail operation, selling products directly to consumers, is the segment most commonly associated with the company.  

Alongside its own product sales, millions of independent sellers pay Amazon to list their products and use its fulfilment network. Together, these two revenue streams account for the lion's share of Amazon's total sales (62% in 2025). 

However, despite generating the majority of revenue, its retail business has notoriously low margins. Amazon compensates for this through scale and by using its e-commerce operation as the foundation for a broader customer ecosystem. Its Prime membership generates recurring subscription revenue whilst keeping customers within this ecosystem through benefits such as faster delivery times, Prime Video and exclusive deals. 

Amazon Web Services (AWS)

AWS is Amazon's cloud computing division. Although it’s perhaps lesser known than Amazon’s core e-commerce business, it's probably the most important segment for investors to understand. AWS provides storage, computing power and software infrastructure to businesses, governments and developers worldwide.  

It dominates the global cloud market, holding a market share of 28% at the end of 2025, which places it comfortably ahead of main rivals Microsoft (21%) and Google (14%). 

Whilst AWS generates significantly less revenue than Amazon's retail business, its profit margins are far higher. Its rapid growth and strong profitability make AWS the primary driver of Amazon's operating income, accounting for 57% in 2025. Consequently, this is the segment that many analysts and investors watch most closely. 

Advertising and Other Revenue

Amazon's advertising business has grown into one of the largest in the world, with brands paying to promote products within Amazon's search results and across its platforms. Alongside advertising, revenue also flows from Amazon’s physical stores, such as Whole Foods, subscriptions and a range of other services. 

Amazon's Financial Performance

Amazon has grown substantially over the past decade, and its most recent results reflect a business that has matured from a high-revenue, low-profit operation into one generating substantial income across multiple segments. 

For the full year 2025, Amazon reported net sales of $716.9 billion, up 12% year on year, with operating income rising 17% to $80 billion. The table below compares key metrics across the last two financial years.

Source: Amazon - Full-Year 2025 Results 

AWS remained the standout performer, contributing $45.6 billion in operating income, more than half of Amazon's total, despite accounting for less than a fifth of overall revenue. Advertising was another area of strength, with revenue growing 22% from the previous year. 

A figure worth noting is free cash flow, which fell sharply from $38.2 billion to $11.2 billion in 2025. This primarily reflects Amazon's decision to deploy around $132 billion in capital expenditure during the year, a figure earmarked to rise to around $200 billion in 2026. This investment will be predominately directed towards AWS and AI infrastructure. 

How to Invest in Amazon: Step by Step

Buying Amazon shares involves a straightforward process that is broadly consistent across most regulated investment platforms. The following steps outline what to expect. 

How to Buy Amazon Stock (Quick Steps): 

1. Choose a regulated broker 
2. Open an account and complete the onboarding process 
3. Search for AMZN 
4. Select order type (market or limit) 
5. Place your trade 

1. Choose a Regulated Broker

The first step is selecting a broker that offers access to US-listed stocks and is authorised by a recognised financial regulator.  

Beyond regulation, you might want to consider the broker's fee structure, the range of instruments available and whether it supports fractional share investing (relevant if you would prefer not to commit to the cost of a full AMZN share). 

2. Open and Fund Your Account

Opening an investment account typically requires proof of identity and address. Most brokers handle this electronically, though some may request supporting documents.  

Once approved, you can deposit funds. Bear in mind that because Amazon shares are priced in US dollars, your broker will convert your deposit into USD when you place an order, which may incur a foreign exchange fee. 

3. Search for Amazon

With your account funded, search for Amazon using its name or ticker symbol - AMZN. Once located, open the instrument page. 

4. Choose Your Order Type

Before placing your order, you will need to select an order type. The two most common are: 

• Market Order: Executes immediately at the best available price. Execution is typically fast for a stock as popular as Amazon, but you will have no control over the exact price you pay. 
• Limit Order: You can set a maximum price you are willing to pay. Your order only fills if the market reaches that price, giving you more control but no guarantee of execution, quick or otherwise. 

For beginner investors looking to buy shares for the long-term, a market order may be the more straightforward option. 

5. Place Your Order and Monitor Your Position

Once you confirm your order, the trade is sent to the market, and once executed, your shares will appear in your account. You can then monitor the current value of your holding in real time through your broker's platform. 

Other Ways to Invest in Amazon Stock

As well as buying shares directly in Amazon, there are alternative ways to gain exposure to the company.

Fractional Shares

At the time of writing, 1 May 2026, Amazon shares trade at around $250. For investors with a smaller amount of capital, this may seem like a lot to invest in one go in one company. 

Fractional share investing helps address this by allowing investors to buy a portion of a single share rather than a whole one. This means you can gain exposure to Amazon for a considerably smaller initial sum. 

Not every broker offers fractional investing, so it's worth checking before you open an account if this is something you’re interested in. 

ETFs

An Exchange-Traded Fund (ETF) is a basket of securities that trades on a stock exchange like a single share.  

Many widely held ETFs include Amazon as one of their largest individual holdings, such as ETFs which track the S&P 500 index, where Amazon is a major constituent.  

Investing in an ETF that holds Amazon provides exposure to the company alongside a range of other stocks. This may suit investors who prefer broader diversification over concentrating their capital in a single company. However, it means that returns are influenced more by the performance of other holdings in the fund, rather than Amazon alone. 

Costs to Consider

Besides the price of the share itself, several additional charges can affect your overall return: 

• Commission: Most brokers charge a fee each time you place a trade, either as a flat fee per transaction or a percentage of the order value. Some brokers may advertise commission-free trading, but they most likely recoup their costs elsewhere, such as through wider spreads or higher foreign exchange fees. 
• Foreign Exchange Fees: Because Amazon shares are priced in US dollars, investors outside the US will need to convert their local currency into USD when buying, and back again when selling. Brokers typically charge a fee for this conversion, either as a fixed percentage or built into the exchange rate they offer. 
• Account Maintenance Fees: Some brokers charge an ongoing fee to hold investments on your behalf, either a flat monthly or annual charge, or a percentage of your portfolio value. Others charge nothing for custody but make their money through trading commissions instead. 

Investing in Amazon: Key Considerations

Amazon is one of the most widely held stocks in the world, and it is not difficult to see why.  

Its dominance across e-commerce, cloud computing and digital advertising gives it multiple engines of growth, whilst its scale creates a distinct competitive advantage that’s difficult for rivals to replicate. AWS in particular represents a business within a business that many investors find compelling in its own right. 

That said, Amazon's share price already reflects a great deal of optimism about its future. At current levels, investors are paying a premium for expected future earnings, which means the stock can be sensitive to any disappointment in results or guidance.

The company's current capital expenditure cycle is also worth weighing up. Amazon has said it will spend approximately $200 billion in capital expenditures in 2026. That’s a significant figure. If the investment pays off, it could drive a significant acceleration in earnings. However, if returns disappoint, or take longer to materialise than anticipated, it’s likely to weigh on share price. 

Nevertheless, analyst sentiment towards Amazon remains broadly positive. The AWS backlog, the value of contractually committed future cloud revenue, stood at $244 billion at the end of 2025, up 40% year on year. That backlog provides a degree of visibility into future AWS income. 

Something else to consider is that Amazon does not currently pay a dividend and has not stated any plans to introduce one in the future. Consequently, AMZN shareholders are relying entirely on share price appreciation for their return. 

Risks of Investing in Amazon

Whilst Amazon's financial performance has been strong, as with any investment, there are a number of potential risks to consider. 

• High Capex: As mentioned above, Amazon has committed approximately $200 billion in capital expenditure for 2026, predominantly directed at AWS and AI infrastructure. This is an enormous sum, and the timeline for returns is uncertain. If returns take longer to materialise than expected, it could weigh on share price. 
• AWS Competition: AWS is Amazon's most profitable segment. Although it dominates the market, it does have competition. Microsoft Azure and Google Cloud are both growing rapidly, gaining market share and investing heavily in AI infrastructure. A sustained loss of cloud market share could have an outsized impact on Amazon's overall profitability, given how much of the company's operating income comes from AWS. 
• E-Commerce Margin Pressure: Amazon's e-commerce operation remains a structurally low-margin business. A meaningful slowdown in consumer spending, a rise in costs or increased competition from rivals could squeeze retail margins further and offset gains elsewhere in the business. 
• Regulatory Risk: Amazon faces ongoing antitrust cases in both the US and Europe. The outcome of such proceedings is difficult to predict, but adverse rulings could result in heavy fines and even structural changes to Amazon's business. 

Conclusion 

Amazon is one of the most widely followed stocks in the world, and for understandable reason. It’s one of the largest companies in the world and its combination of businesses gives it a variety of revenue streams that few companies can match. 

Investing in Amazon follows the same process as buying any US-listed stock: open an account with a regulated broker, search for the ticker AMZN and place your order.

Whether you choose to buy a full share, invest fractionally or gain exposure through an ETF, the starting point is understanding the business behind the share price. As with any investment, investors should take time to weigh the opportunities alongside the risks before making a decision. 

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