How to Buy Amazon Shares UK for Beginners in 2024

Amazon (NASDAQ: AMZN) shares could be a great option if you’re based in the UK and want exposure to the US stock market. While some UK brokers charge premiums to access international shares, others offer a commission-free service.

In this guide, we explain how to buy Amazon shares in the UK with low fees. We also discuss the share price potential of Amazon, allowing you to make an informed investment decision.

Where to Buy Amazon Stock in the UK

You’ll need to find a suitable online broker when exploring how to buy Amazon shares in the UK. Not only should your chosen broker offer access to the NASDAQ at competitive fees, but it should be regulated by the Financial Conduct Authority (FCA.)

Below, we reveal the best stock brokers in the UK for buying Amazon shares.

1. eToro –  Buy Amazon Shares With Zero Commission

eToro is a multi-asset broker that offers thousands of shares from the UK, US, Europe, and beyond. It’s one of the best brokers to buy Amazon shares since it offers 0% commission for stock and ETF trading.

That means you’ll pay no fees to buy Amazon shares in the UK. Few other UK brokers offer completely commission-free trading on US shares making eToro one of the most competitive platforms on the market.

eToro is user-friendly and offers a wide range of tools to help traders and investors. Traders can take advantage of technical charting features with dozens of built-in indicators to help you find the best opportunities to buy and sell AMZN.

Many novice traders take advantage of the eToro copy trading feature that allows you to track and mimic other more experienced traders on the platform. 

Investors can dive into Amazon’s financial data, including balance sheets, cash flow and income statements. eToro also offers access to 12-month price targets from Wall Street analysts.

eToro also offers an Amazon-specific news feed, making it easy to stay up to date on the latest happenings around this tech giant.

eToro is regulated in the UK by the FCA. It’s simple to open a new account with just $100 (depending on your country).

Risk disclaimer: 74% of retail CFD accounts lose money – your capital is at risk. 

2. XTB – FCA Regulated Broker Specialising in CFDs 

Second on our list of for the top places to buy the best shares in the UK, XTB is an FCA-regulated broker that specializes in contracts-for-differences (CFDs). This means that you’ll be able to trade Amazon shares without owning them. CFDs track the value of Amazon shares in real-time and offer a range of perks. For example, you can trade Amazon shares with leverage of up to 1:5. So, if you risk £500 on an Amazon buy order, you can enter a position worth £2,500.

Additionally, XTB also supports short-selling. If at any point you believe Amazon shares are overvalued, XTB makes it easy to profit from a potential stock price decline – you simply need to place a sell order. XTB is also one of the most cost-effective places to trade Amazon shares. It doesn’t charge any trading commissions and spreads are very competitive.

For instance, the spread on Amazon shares is just $0.43. This means that you’ll pay just $0.43 for every Amazon share that you trade. XTB also supports more than 2,000 other shares. This includes other popular US companies like Tesla, Apple, Microsoft, and Meta Platforms. You can also trade shares listed in the UK and the European markets.

XTB also supports commodities like gold and oil, not to mention forex and indices. However, as a UK investor, you won’t have access to cryptocurrencies. There is no minimum deposit requirement at XTB and the broker accepts UK debit/credit cards and bank transfers. A selection of e-wallets are also supported.

If you’re new to CFDs, consider opening an XTB demo account. It’s completely free and allows you to trade shares with virtual funds.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider.

3. AvaTrade – Top Rated Broker With Low Stock Spreads and Fast Account Opening

AvaTrade is registered and licensed in many regions throughout the globe, with its headquarters located in Dublin, Ireland. At the time of this writing, it has an impressive 4.7 star rating on TrustPilot, out of over 8,000 reviews. This is quite rare and is testimony to the standard of customer care and the fluidity at which the platform operates.

AvaTrade is perfect for beginner stock traders as it is very easy to set up your account and start trading shares such as Amazon (available as a CFD). Most clients report a positive relationship with their personal account manager – many providers have a personal account manager that is difficult to get hold of, or does not do an adequate job. This is actually where a large proportion of the positive online reviews come from.  

Everything about AvaTrade is streamlined and easy to use. It has a simple interface for easy and direct trading. There are no withdrawal fees, though there is a £100 minimum deposit. Fees for CFDs are low, though inactivity fees are £50 per quarter with an additional £100 per year (£300 for 12 months of inactivity – you need to be active with AvaTrade). Leverage is up to 1:30. 

It’s clear where AvaTrade shines and where it is lacking. It’s perfect for novice and intermediate stock and ETF traders, as it is a low fee provider with quick setup times and an excellent reputation for customer service. The platform also offers copy and social trading Through AvaSocial, ZuluTrade, MQL5 Signal, and DupliTrade.  

It’s not really suited to Forex traders so much as it has higher fees and does not offer a wide range of functional trading features in comparison to other providers. It’s a simple platform with features that are ideal for new investors. It has a low number of offerings (250+), but this might be beneficial to those interested in focusing their attention without getting distracted. 

What are the downsides of AvaTrade? It’s not regulated by the FCA and it only offers CFDs on stocks, without any direct share ownership. It also has high inactivity fees, high FX fees, and a relatively large minimum deposit of £100. But there are no commission fees with AvaTrade. 

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider.

4. Trade Nation – Commission-Free Trading Accounts With Spreads of $0.02 per Share          

Trade Nation is a user-friendly CFD broker with its own proprietary platform – TN Trader. We found that Trade Nation offers highly competitive fees – especially when trading Amazon shares from the UK. For example, there are no trading commissions to pay, irrespective of the share market. Moreover, Trade Nation offers spreads of $0.02 per slide when trading Amazon shares.

For example, suppose you decide to trade two Amazon shares – you’ll simply pay $0.04 to enter the market. And when closing your position, you’ll again pay just $0.04. Unlike other CFD brokers, spreads on Trade Nation are fixed. This means that you’ll always know exactly what you’re paying. If you decide to trade shares from other markets, the spread model is slightly different.

For example, UK shares can be traded with spreads of 0.1%. This means you’ll pay just £1 for every £1,000 traded. European shares are less competitive, as spreads amount to 0.2%. In addition to shares, Trade Nation supports plenty of other markets. This includes dozens of forex pairs, commodities, and indices.

When it comes to safety, Trade Nation is regulated by multiple licensing bodies. Not only in the UK but Australia, South Africa, and the Bahamas. Client-owned funds are held in segregated bank accounts. To deposit funds into a Trade Nation account, you can use a debit/credit card, bank transfer, or Bitcoin. You can also start off with the Trade Nation demo account, which is free to use.

Financial Spread Bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider.

Why Invest in Amazon?

Amazon is one of the largest companies globally. It has also provided investors with significant gains since it went public in 1997. However, this doesn’t necessarily mean that Amazon is a suitable investment for your portfolio.

In this section, we explore the Amazon investment thesis. Read on to determine whether buying shares in Amazon is right for you.

Note: Amazon shares trade in the US, so its share price is quoted in US dollars. For this reason, in this guide, we discuss Amazon’s share price history and potential in US dollars.

Amazon Has Generated Significant Returns Since it Went Public

Those holding Amazon shares long-term have witnessed significant returns. For instance, when Amazon went public in May 1997, its shares were priced at just $0.09 (adjusted for multiple stock splits – more on this later).

So, in 1997, it would have cost you just $900 to buy 10,000 Amazon shares. Although Amazon has gone through a lot of volatility over the prior decades, it’s now worth over $182 per share. This means that since it went public, Amazon has increased in value by over 202,000%.

Therefore, if you invested $5,000 into Amazon shares in 1997, your money would now be worth $10.6 million.

In comparison, the FTSE 100 has offered mediocre returns. The UK’s benchmark stock index contains the 100 largest companies on the London Stock Exchange. Since its inception in 1984, the FTSE 100 has increased by just 627%. This is just a fraction of Amazon’s 202,000% gains.

Amazon shares are currently trading at about $175, that’s just 6% below its all-time high of $186.57 it reached on July 8, 2021. However, Amazon’s long-term value could be significantly higher – as we explain throughout this guide.

Q1 2024 Earnings Exceeded Wall Street Expectations 

When assessing the potential of an Amazon stock investment, you should evaluate the firm’s quarterly earnings report. This is a legal requirement for all publicly listed companies and it outlines Amazon’s performance in the most recent three-month period. In other words, quarterly earnings reports give you an in-depth view of how Amazon is performing.

Amazon’s most recent earnings report covered the first three months of 2024. As far as its key metrics go, net income more than tripled to $10.43 billion, or $0.98 per share, from $3.17 billion, or $0.31 per share a year earlier. Revenue rose 13% year over year to $143.3 billion. Both profit and revenue beat Wall Street analysts’ expectations. The results were driven by ad revenue and demand for its cloud services.

Amazon is the world’s largest online retailer by market cap, but its empire extends beyond e-commerce. It also dominates the market for cloud services with its Amazon Web Services (AWS) business, although Microsoft with its could offering is hot on its heels.

AWS is already Amazon’s most profitable business, contributing more than 60% to the e-commerce giant’s profit, but only accounting for about 17% of its revenue.

• AWS posted revenue of $25 billion in the quarter, rising 17% from a year earlier, beating analysts’ expectations.
• Ad revenue totaled $11.84 billion, up 24% year over year, slightly higher than forecasts. 

Robust Balance Sheet Will Fuel Innovation and Acquisitions  

Amazon has one of the strongest balance sheets globally. This ensures that Amazon can weather any economic storm. Amazon held almost $87 billion in cash and short-term investments at the end of the first quarter. With this liquidity, there is no concern about its ability to fund its investment plans. 

Additionally, its strong financial position will enable Amazon to do what it does best; innovate. Its research and development division is industry-leading, covering everything from artificial intelligence (AI) and machine learning to drone deliveries and autonomous supply chain management.

Amazon can also use its robust cash flow position to increase its acquisition strategy. As it embraces AI technology, in September, it pledged to invest as much as $4 billion in AI start-up Anthropic, which created a ChatGPT rival. As part of the deal, Anthropic said it will use AWS for “a majority of workloads” and AWS-designed chips to train future AI models.

Some of its other recent acquisitions include Metro-Goldwyn-Mayer ($8.5 billion), Whole Foods ($13.7 billion), and Zoox ($1.2 billion). This strategy enables Amazon to diversify into lots of different markets, rather than relying solely on its e-commerce division.

Amazon Has a Well-Diversified Business Model   

Amazon has a highly diversified business model that covers a wide range of products, services, and target markets.

Let’s break down some of its core divisions:

E-commerce

Amazon’s e-commerce division sits at the heart of the company. This can be broken down into two core segments.

First, it allows third-party merchants to sell their products on the Amazon marketplace. This is a risk-averse strategy, as Amazon isn’t required to directly purchase or hold stock. Moreover, sellers will distribute products directly to the customer – Amazon simply takes a commission.

That said, third-party merchants can also sign up for the Fulfilled by Amazon service. This means merchants send their products to an Amazon warehouse. Amazon will then ship the products once they are purchased from a customer.

Second, Amazon also has its own products and services that can purchased on its website. This enables Amazon to target much higher profit margins, as it sells directly to consumers. Either way, Amazon sells every product type imaginable – from clothes, TVs, and books to gaming consoles, smartphones, and merchandise.

Amazon Prime

Amazon Prime, which offers consumers a range of benefits, such as free shipping and a video and music streaming service, is also an important division of the company. Amazon Prime has about 200 million members, 167 million of them in the U.S.

Amazon Web Services

Cloud computing is a huge growth market; Amazon Web Services (AWS) is the market leader in this space. For example, as of Q4 2023, AWS has a 31% market share. Microsoft Azure and Google Cloud have 24% and 11%, respectively.

Although AWS saw a slight drip in the fourth quarter (down from 32%) and Microsoft’s Azure is narrowing the gap, cloud services remain a huge revenue and profit driver for Amazon. After all, in the first quarter, the cloud division contributed $25 billion to revenue and accounted for $9.4 billion of the company’s total operating income of $15.3 billion.

Groceries 

Amazon is also present in the grocery niche – allowing US, and also UK, consumers to order their food and beverages online. It offers super-fast deliveries to Prime members at competitive pricing. It already has an established distribution system, not to mention a fully-fledged supplier network after its Whole Foods acquisition.

Currently, Amazon’s grocery division represents just a 2% market share – just a fraction of Walmart’s 18% in the US. However, this is still a new market for Amazon, so it’s expected to grow significantly in the coming years.

Amazon Pharmacy 

Another high-growth market in Amazon’s portfolio is pharmaceuticals. Put simply, it now runs a full-service online pharmacy, offering affordable drug prices and speedy deliveries.

Like many of its divisions, additional perks are available to Prime members. For example, Prime members receive free 2-day shipping, while standard members need to wait 4-5 days. Moreover, Amazon Pharmacy accepts most US insurance plans, a key factor for many when choosing a provider.

Amazon Has Further Untapped Potential in Advertising  

Advertising could be one of Amazon’s biggest revenue drivers in the coming years. Currently, it’s also one of Amazon’s fastest-growing markets. For example, in the first quarter of 2024, advertising contributed more than $11.84 billion to revenue, up 24% year over year.

After all, Amazon is home to hundreds of millions of customers – whether that’s through e-commerce, video streaming, or cloud computing services. Crucially, Amazon has access to an unprecedented amount of data, allowing it to offer highly targeted ad campaigns. Amazon also leverages AI in the advertising process, for instance, to suggest products and services specifically to each user.

According to Andy Friedland at Swiftly, a technology platform offering services to retailers, Amazon’s advertising division could grow to $100 billion annually.

Continued Improvements to Amazon’s Distribution Network  

One of the most important drivers for Amazon’s e-commerce business is speed. Consumers want to conveniently order products online and receive their items quickly. While Amazon is already known for its efficient delivery processes, improvements continue to be made. Amazon recently invested significant resources into its US delivery network, switching to a regional model to save costs and increase speeds.

Amazon Share Price History – How Much Is Amazon Stock Worth

In this section, we’ll take a much closer look at the Amazon stock price history. This will enable you to gauge what sort of returns Amazon could produce in the future.

Amazon became a publicly traded company in May 1997 – less than three years after the company was founded by Jeff Bezos. Its IPO set an initial price of $18 per share. Amazon issued 3 million shares, meaning it raised just $54 million from investors. However, Amazon has initiated four stock splits since its IPO. As such, Amazon’s IPO price should be adjusted to $0.09.

After going public, Amazon shares witnessed a major price increase. This was because internet stocks were a hit commodity during the late 1990s. This period was known as the ‘dot.com bubble’. However, Amazon, like most internet stocks, capitulated when the bubble burst. In fact, CNBC explains that at one point, Amazon shares were down 90% from their prior highs. Crucially, it took Amazon more than a decade to recover from the burst of the dot.com bubble.

Nonetheless, those who bought Amazon shares in the 2000s are now looking at significant growth. After all, Amazon hit an all-time high of more than $186 in July 2021. Compare this to its IPO price of $0.09, and that’s gains of over 194,000%.

In terms of more recent price performance, Amazon shares are trading just about $11 off its record high. The price more than doubled in the past five years and has gained 17% so far this year.  In contrast, the Nasdaq Composite index has risen 7.6% this year.

Amazon Stock Forecast

You might be wondering what the future holds for Amazon’s share price. While predicting future stock prices is challenging, one of the best resources is analyst ratings and price predictions.

These are given by sell-side investment bank analysts who cover the stock. They will estimate where the share price will be in the future based on fundamental and technical analysis. They also declare whether they recommend investors buy, hold or sell a certain stock.

According to 60 sell-side analyst ratings over the previous three months, Amazon is rated as follows:

• Strong Buy: 44
• Buy: 14
• Hold: 2
• Sell: 0
• Strong Sell: 0

These figures show that Wall Street overwhelmingly views Amazon as a solid investment. The consensus price target for Amazon shares in 12 months is $207.32, a 13% upside.

Some Brokers Charge a Premium on Non-UK Shares

You should consider investment fees when buying Amazon shares in the UK. This is because some UK brokers charge a premium on international shares. For example, Hargreaves Lansdown charges a 1% FX fee when investing in Amazon stock. You’ll pay this fee twice – when entering the market and again when you sell. This is in addition to Hargreaves Lansdown’s £11.95 commission (also charged twice).

In contrast, eToro allows UK investors to buy Amazon shares without paying any commission. This makes eToro cost-effective in the long run – especially if you’re planning to invest in lots of different US companies.

How to Buy Amazon Stock UK Tutorial

If you’re ready to buy Amazon shares in the UK, we will now explain the process step-by-step.

We’re using eToro for this tutorial because:

• It’s regulated by the FCA
• You won’t pay any commissions to buy or sell Amazon shares
• You only need to meet a $10 (about £8) minimum investment
• You’ll also have access to thousands of other shares
• It’s user-friendly and you can deposit funds with a UK debit/credit card, e-wallet, or bank transfer

Follow the steps below to buy Amazon shares in under five minutes.

Step 1: Open an eToro Account

First, you’ll need to visit the eToro website to open an account. Select “Create account” from the main page and fill up the form by providing your email, name and country of residence.

Step 2: Upload KYC Documents

All FCA-regulated brokers follow standard KYC (Know Your Customer) procedures. This means that eToro will ask for some verification documents to prove your identity.

Upload a passport, ID card, residence card or a voter card.

The process is automated and shouldn’t take long.

Step 3: Deposit Money 

You’ll need to deposit some money before you can buy Amazon shares in the UK.

You can choose from the following payment methods:

• Debit/credit card
• Paysafe
• PayPal
• Bank transfer

Step 4: Buy Amazon Shares

You can now search for Amazon shares on the web trading station. Once you type ‘Amazon’ into the search box, you’ll see the stock appear.

Conclusion

Most analysts at major investment banks that cover maintain a ‘Strong Buy’ recommendation for the stock. Amazon shares are up 23% this year, outperforming the Nasdaq Composite index. Amazon displayed solid revenue and earnings growth in its most recent quarter, exceeding Wall Street analysts’ expectations.

If you’ve done the research and want to buy Amazon shares in the UK, consider eToro. You won’t pay a premium to invest in US-listed stocks, as eToro offers a commission-free service. eToro is regulated by the FCA, for your peace of mind.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider.

References

• https://www.wsj.com/market-data/quotes/AMZN
• https://www.google.com/finance/quote/AMZN:NASDAQ?sa=X&ved=2ahUKEwiW2ImO1o-BAxWBzjgGHd73ALcQ3ecFegQIMRAf&window=MAX&comparison=INDEXFTSE%3AUKX
• https://s2.q4cdn.com/299287126/files/doc_financials/2023/q2/Q2-2023-Amazon-Earnings-Release.pdf
• https://www.cnbc.com/2023/08/03/amazon-amzn-q2-earnings-report-2023.html
• https://finance.yahoo.com/news/amazon-is-quietly-building-the-most-powerful-advertising-machine-in-the-world-135753395.html
• https://www.fscs.org.uk/media/press/2019/apr/higher-protection-limits/
• https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim22015
• https://www.cnbc.com/2018/12/18/dotcom-bubble-amazon-stock-lost-more-than-90percent-long-term-investors-still-got-rich.html
• https://seekingalpha.com/symbol/AMZN/ratings/sell-side-ratings
• https://www.cnbc.com/2023/08/20/top-wall-street-analysts-pound-the-table-on-stocks-like-amazon.html
• https://www.thestreet.com/trading/amazon-stock-gets-a-surprising-price-target
• https://www.usatoday.com/money/blueprint/investing/stock-forecast-amazon/
• https://www.statista.com/statistics/1331129/amazon-share-price-development-monthly/
• https://www.statista.com/statistics/265645/ranking-of-the-20-companies-with-the-highest-spending-on-research-and-development/
• https://www.statista.com/chart/18819/worldwide-market-share-of-leading-cloud-infrastructure-service-providers/

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Kane Pepi

Editor

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Kane Pepi

Editor

Kane Pepi is an accomplished financial and cryptocurrency writer who has an extensive portfolio of over 2,000 articles, guides, and market insights. With his expertise in specialized subjects such as asset valuation and analysis, portfolio management, and financial crime prevention, Kane has built a reputation for providing clear explanations of complex financial topics. He holds a Bachelor's Degree in Finance and a Master's Degree in Financial Crime, and is currently pursuing his Doctorate degree, which focuses on investigating the complexities of money laundering in the cryptocurrency and blockchain technology sectors. Kane's wealth of knowledge and experience in the field make…

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