Amazon is one of the most valuable stocks in the world. How much is Amazon stock? Well, it costs nearly $3,000 per share (as of midmorning July 24, 2020). However, that doesn’t mean buying Amazon stock is out of reach for you. In fact, it’s possible to invest in Amazon even if you don’t have enough money to buy a single share.
Let’s take a look at the history of Amazon stock as well as a couple of different ways you can buy Amazon stock. We’ll even show you how to buy Amazon stock even if you don’t have a lot of money.
An overview of Amazon
Amazon.com, Inc. was founded in 1994 and is headquartered in Seattle, Washington. The company was founded by Jeff Bezos, whose parents invested $250,000 in the company to help it take off.
Since then, Amazon has grown into one of the world’s largest retailers and has become an e-commerce powerhouse. Jeff Bezos, who is still the CEO of Amazon, is one of the richest people in the world as a result of the company’s growth over the past couple decades.
Even though Amazon was originally known for selling books, the company has expanded over the years to include a number of other products and services. Some of the most well-known services and products include:
- Amazon Web Services (AWS), which offers cloud computing
- Kindle reader
- Fire tablet
- Prime Video, which offers streaming content
- Amazon Prime, which offers two-day shipping and other benefits
- Home assistants Echo and Alexa
- Amazon Music, a music streaming service
Amazon also bought Whole Foods Market, which puts the online retail giant into the world of grocery stores. This also allows Amazon to manage grocery delivery, even though it is ostensibly an internet company. Another interesting acquisition by Jeff Bezos in recent years was the purchase of The Washington Post, the well-known newspaper.
Individual sellers can also set up a storefront to sell items on Amazon, and the company makes it easy to self-publish books and e-books. The platform makes it easy for independent sellers and resellers of all kinds to showcase their goods. Services like Fulfillment by Amazon can also handle packaging and shipping for retailers. Amazon has fulfillment centers all over the U.S. and is building a second headquarters in Arlington, Virginia.
What you need to know about Amazon stock
When you ask, “How much is Amazon stock?” it’s important to put it into perspective. The reality is that the stock prices of all companies change on a daily basis — sometimes minute-to-minute. No matter how you invest money or what you invest in, there's a possibility you can lose more than you invest.
However, over time, Amazon stock (AMZN) has seen a steady rise. On May 16, 1997, the day after Amazon’s stock first went public at a price of $1.50 per share after being adjusted for stock splits, Amazon shares were selling for $1.73 each. Over time, Amazon stock grew in value. Although Amazon took a hit during the stock market crash 10 years ago, the overall trend has been positive. Indeed, today Amazon stock sells for nearly $3,000 per share (as of midmorning July 24, 2020) on the Nasdaq.
In 2019, Berkshire Hathaway, Warren Buffett’s company, bought nearly $1 billion of Amazon stock. More recently Amazon stock has benefited from the fact the coronavirus pandemic is encouraging many people to stay home and order items online. Some analysts think Amazon stock could see a 16% boost in value in 2020.
Amazon’s stock has benefitted so much from COVID-19 that Jeff Bezos, who owns a lot of stock in his own company, saw the biggest single-day increase in net worth on July 20, 2020, according to the Bloomberg Billionaires Index. Amazon’s stock price jump that day added an estimated $13 billion to Jeff Bezos’ wealth.
How to buy Amazon stock
If all this has you interested in investing in Amazon, there are two main ways you can purchase Amazon’s shares. Before you try one of these ways, though, it’s also worth noting that you can also get exposure to Amazon stock by investing in index funds. As a major component of U.S. stock indexes, when you invest in index funds or ETFs, you get exposure to Amazon stock.
You can indeed buy more directly, though. Here’s how to buy Amazon stock:
1. Open a brokerage account
When you buy and sell shares of stock on the market, you need to use a broker. Most brokers offer online brokerage accounts that allow you to invest without too much trouble. Some of the more traditional brokerage accounts are Schwab and Fidelity. You can also use a broker like Etrade or Robinhood to buy Amazon stock.
When you trade with a brokerage account, you have the most control over when and how you trade. However, as you decide how to choose a brokerage, take into account that you might need to buy full shares or meet an account minimum. For some investors, this can present a financial obstacle to getting started in the stock market. In the past, some brokerages also charged transaction fees for each trade, but some brokers have waived those fees in recent months.
Realize, though, that if you have to meet minimums, or if you need to buy full shares of companies, you might not be able to invest in Amazon until you’ve saved up enough money. But don’t let that stop you — this problem is what our next option for buying Amazon stock can solve for you.
2. Buy fractional shares
There are some online trading platforms that don’t make you purchase full shares. In some cases, with services like Stash, you can actually buy fractional shares, which are essentially fractions of shares. This allows you to buy Amazon stock without needing to have $3,000 saved up to buy even a single full share.
So, in the case of Amazon, you might be able to purchase an eighth of a share. You would only need to invest $375 to get an eighth of a share of Amazon, instead of needing to come up with $3,000 at once. Over time, you could keep buying fractional shares and benefiting if stock prices rise. Even without a full share, your investment will gain in value if the stock price goes up. In this way, you can still reap the potential benefits of buying Amazon stock without a large outlay of money upfront.
Stash has additional convenient investing features as well. You can set up automatic transfers of as little as $5 and automatically invest in fractional shares of any available stock. Stash also offers banking products that can complement your investments and even earn you Stock-Back® rewards when you use your debit card.
Even better, Amazon isn’t the only hot company you can invest in through Stash. You can also get fractional shares of Tesla, Apple, and Netflix. Plus, for those interested in index investing, there are index ETFs available via Stash.
Is buying Amazon stock the right move for you?
Anytime you’re evaluating a stock, you need to decide whether it’s the right investment decision for you and your personal finance goals. One of the hazards of investing in individual stocks is that you could end up losing out if that company declares bankruptcy or goes out of business. Although it’s hard to imagine such a fate for Amazon, it’s still a possibility.
Another thing to take into account is that because Amazon had such an amazing run-up in stock price, getting in now isn’t likely to provide you similarly dramatic returns. Many people who have made a lot of money picking individual stocks did so because they bought shares early on and benefited from the big gain in value. The time is past where you can buy Amazon for less than a few dollars per share and reap the big gains. However, you might still be able to meet your portfolio growth goals even when you buy fractional shares of Amazon.
If your goal is income investing, Amazon probably won’t work for you. Amazon has never paid a cash dividend (a portion of the company’s profits paid out to eligible shareholders). It doesn’t appear that Amazon is likely to adopt a dividend in the near future, though the company could decide to at some point. For the most part, Amazon stock is likely to work best for those who are looking for growth in their portfolios and believe Amazon still has room to increase in stock price.
If you are considering including Amazon stock in your investment strategy, you need to consider the potential risk of Amazon being hard-hit and losing value. Some investors prefer index funds and ETFs in order to benefit from the market as a whole, rather than trying to build a complete portfolio from individual stocks. However, with indexing, you won’t ever beat the market. Index funds are designed to track the market. By investing in Amazon stock, you might have a chance to do better than the market — especially if Amazon stock continues to increase in value.
Before you decide how to buy Amazon stock, it’s a good idea to sit down with a financial advisor or come up with your own investing plan. Figure out how much you want to invest, and set some specific financial goals for the future. It’s also a good idea to figure out when you might sell some of your shares and take profits. This will also play into your tax planning.
Just remember that with investing, there’s always the risk of loss, no matter what you choose to invest in.
FAQs about Amazon stock
Can you buy a fraction of Amazon stock?
Yes, there are brokers and online trading services that offer the ability to purchase fractional shares of Amazon stock. Before opening a brokerage account or setting up an online trading account to buy Amazon stock, check to see whether the service offers fractional shares. Not every trading service offers fractional shares, and it’s not possible to get fractional shares of every company.
Is Amazon still a good stock to buy?
Whether Amazon is a good stock to buy depends on your goals and financial situation. Some analysts believe based on its past performance that it still has room to increase in value, so buying stock could mean portfolio growth down the road. However, you still have to do your due diligence and recognize there’s always the possibility of loss when you invest.
How much does it cost to buy a share of Amazon?
As of this writing, a share of Amazon (AMZN) costs a little less than $3,000 (midmorning July 24, 2020). However, stock market prices fluctuate daily, so the actual share price will depend on the cost at the timing of your purchase. Additionally, if your broker charges transaction fees, those need to be added to your final cost.
You can also buy fractional shares of Amazon by using certain online trading platforms that allow you to purchase a portion of a stock without needing to pay the full amount for a full share. In that case, you might be able to buy a fractional share of AMZN stock for much less than the full stock price.
Does Amazon pay dividends on its stock?
No. Amazon has never issued a dividend. A dividend is a payout a company makes to share its profits with eligible shareholders. Amazon doesn’t pay dividends on its common stock, so if you purchase Amazon stock, you only benefit from its growth in value and you won’t receive regular income in the form of dividends.
It’s important to note we aren’t financial advisors, and we aren’t offering investing advice. This information about Amazon is designed to help you learn more about the stock so you can make your own choice about whether it makes sense to add Amazon stock to your portfolio.
There are many ways to build a portfolio, and before you decide how to go about starting in the stock market, it’s a good idea to consider your goals and risk tolerance and create a plan that matches your individual situation.