How to invest in Amazon
Why buy Amazon stock?
The first question you might ask yourself is why you might want to invest in Amazon. For starters, it is one of the most successful and well-established companies in the world with a proven track record of growth and innovation.
A leader in the e-commerce market, Amazon has also diversified into other areas such as cloud computing, streaming media, and advertising. With a large and loyal customer base, and a strong financial position, Amazon is considered by many to be a solid long-term investment. However, it's important to conduct your own research and consider your own investment goals and risk tolerance before making any investment decisions.
The question of whether you should invest in Amazon (or any other specific stock) is ultimately a decision that you should make based on your own research and investment goals. However, here are some things you may want to consider before making a decision:
The Pros & Cons of investing in Amazon
|Amazon is a well-established and successful company: This means that there is less risk involved in investing in Amazon shares than in investing in shares of a less well-known company.||Amazon shares are volatile: the share price of Amazon can go up and down a lot in a short space of time. This means that there is a risk that you could lose money if you invest in them.|
|Amazon has a good track record of delivering returns for shareholders. Shares have shown consistent growth: over the past five years, Amazon shares have risen in value by an average of 20% per year. This makes it a good investment for people who are looking for long-term growth.||Past performance is not a guarantee of future performance, and that investing in any stock carries some level of risk. The stock market can be volatile, and the value of any individual stock can fluctuate.|
|Amazon has a long history of growth and innovation, and is a leader in the e-commerce market, with a large and loyal customer base, and a strong financial position.||You are investing in just one company: When you invest in Amazon shares, you are putting all your eggs in one basket. This means that if the company does not do well, your investment may suffer.|
|Amazon has diversified into other areas such as cloud computing, streaming media, and advertising, which may provide additional sources of revenue in the future.|
Analysing Amazon’s financial performance
In terms of financial performance, Amazon has consistently reported strong revenue growth over the past several years. In 2020, the company reported net sales of $386 billion, a 38% increase over the previous year. Operating income also increased by 36% to $15.9 billion, and net income increased by 36% to $21.3 billion. Additionally, the company has a strong balance sheet with significant cash and marketable securities.
As for the share price, Amazon's stock has performed well over the past several years. The stock was consistently growing and reached an all-time high of about $3500 in 2021. However, it's worth noting that the stock market can be volatile and the value of any individual stock can fluctuate. Amazon historically however, has been a high-growth stock, which means that investors are willing to pay a premium for the company's expected future growth.
It's important to remember that past performance is not necessarily indicative of future results, and that investing in any stock carries some level of risk. Be sure to conduct your own research, consider your own investment goals and risk tolerance before making any investment decisions.
How to invest in Amazon shares with Skilling
To ‘buy’ Amazon stock, you'll need to open an account with Skilling or another trusted broker that offers share/stock CFD trading. You can invest in Amazon shares, as well as some of the biggest stock exchanges in the world with a Skilling account. Trading CFDs with Skilling has additional advantages like:
- Multiple, innovative platforms to trade on
- No account maintenance fees and competitive transaction commissions
- Exclusive access to our blog, where you can find the most recent news, technical knowledge, and market sentiment at no extra cost!
- The security of investing with a broker who is licenced and regulated by the Cyprus Securities and Exchange Commission (CySEC), FSA, and other reputable financial authorities
- When did Amazon announce its Initial Public Offering (IPO)?
- On May 15, 1997, Amazon went public at a price of $18 per share.
- When did Amazon split its stock?
- Amazon has split its stock four times over its history. On June 6, 2022, Amazon's stock underwent its most recent split, which was 20:1.
- How much dividend does Amazon stock pay?
- Amazon has not historically and does not currently pay dividends, nor has the corporation indicated any intentions to do so in the near future. The company has instead chosen to reinvest profits back into the business for growth and expansion.
Not investment advice. Past performance does not guarantee or predict future performance.
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