Amazon (AMZN -0.33%) is the world's second-largest retailer behind Walmart (WMT 0.93%). The e-commerce giant generated $575 billion in total revenue in 2023.
The company is briskly increasing its revenue and could overtake Walmart as the world's largest retailer as early as 2024. It's also a global leader in cloud computing. Amazon's growing sales have helped drive its stock price higher over the years, and the upward movement could continue.
You're probably contributing a fair share to Amazon's growing revenue, which might have you thinking about investing in the company. Here's a step-by-step guide on investing in Amazon stock, including how much it costs to buy shares of the top e-commerce company.
How to buy Amazon stock
How to buy Amazon stock
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker (AMZN) or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Should I invest?
How much does it cost to buy Amazon stock?
For years, Amazon stock had seemed out of reach to many beginning investors because it traded at a high price per share. However, the e-commerce giant completed a 20-for-1 stock split in 2022.
The split reduced the share price from its pre-split level of about $2,300 per share to a post-split price of $115 per share. In reducing the stock's cost, Amazon made buying shares more accessible to beginning investors.
The share price has increased a bit since its split in 2022. However, purchasing one share is still within the reach of most people just starting their investing journey. In late 2024, Amazon's stock was almost $190 per share.
If almost $190 per share is still too high for you, don't fret. You have another option that will allow you to buy shares of Amazon with little money.
Many brokerage platforms enable users to invest in fractional shares. A fractional share is less than one full share. (Here are some of the best brokers for fractional share investing.) Many of those brokers let you invest in Amazon and other companies for as little as $1, allowing you to steadily invest money in Amazon stock as you add cash to your portfolio.
How much should I invest?
How much should I invest in Amazon stock?
The amount you invest in Amazon stock is up to you. However, here are some basic stock market guidelines for investors:
- Before investing in Amazon (or any other stock), pay off high-interest loans like credit cards and build up an emergency fund that can cover several months' worth of expenses.
- Only invest money you won't need in the next three to five years.
- Build a diversified portfolio. The Motley Fool recommends that investors expand their portfolios to about 25 stocks without allocating more than 10% to any one position. Although Amazon will likely start as a larger allocation, you should aim to diversify by investing in other high-quality companies in different stock market sectors.
- Understand the risks of investing in Amazon, including the possibility that the shares could lose value. Don't invest more money in Amazon than you could afford to lose.
- Limit your investment in Amazon to a comfortable level so you don't stress out if shares decline in value.
With its share price approaching $200, you probably should have around $2,000 available to invest before buying one share. If not, you should allocate less than 10% of what you have available to invest in buying fractional shares.
Due Diligence
ETF options
How to make a stockless investment in Amazon through ETFs
Many people don't have the time to invest directly into buying individual stocks like Amazon. However, they still want to invest in the company but in a more passive way.
Exchange-traded funds (ETFs) can be a great way to invest passively in Amazon stock. ETFs trade like stocks but hold shares of many companies, making them an easy way to gain broad exposure to the entire stock market or a specific stock market sector. You can buy ETFs just like you'd purchase shares of Amazon's stock, using the ETF's ticker instead of Amazon's.
Exchange-Traded Fund (ETF)
According to ETF.com, 458 ETFs held 797.9 million shares of Amazon in late 2024. The SPDR S&P 500 ETF (SPY 0.4%) owned the most shares of Amazon, at 112.8 million. Amazon was that ETF's fourth-largest holding, with a 3.6% portfolio weighting.
Many other ETFs have even larger portfolio allocations to Amazon. The Consumer Discretionary Select Sector SPDR Fund (XLY 0.95%) had a more than 22.5% portfolio weighting to Amazon stock in late 2024, making it an even better way to gain meaningful stockless exposure to Amazon and the consumer discretionary sector.
Related investing topics
The bottom line on investing in Amazon
Amazon is the world's second-largest retailer. It has its sights set on eventually overtaking Walmart at the top, which could drive its stock price higher.
Thanks to the company's recent stock split and the increasing availability of fractional share investing, it doesn't cost much to invest in Amazon. Also, given the ease and convenience of ETFs, you don't have to invest directly in Amazon if you don't have the time, making it even easier to invest in the e-commerce giant these days.
FAQ
FAQ on investing in Amazon stock
Can I invest directly in Amazon?
Yes, you can invest directly in Amazon. To invest money in Amazon, you'd need to:
- Open and fund a brokerage account.
- Fill out the order page, including:
- The correct ticker symbol (AMZN for Amazon).
- The number of shares you wish to buy or the dollar amount you want to spend if you're buying fractional shares.
- Whether you want to place a market or limit order.
- Submit your trade.
Is it a good idea to invest in Amazon?
Amazon stock has historically been a very good investment. As of late 2024, Amazon shares have delivered more than double the average annual total return of the S&P 500 over the last decade (28.6% versus 12.1%). While past success is no guarantee of future returns, Amazon's growing e-commerce and cloud businesses should increase its revenue and profits. The growth could continue driving its share price higher.
How much is $10,000 invested in Amazon 10 years ago?
A $10,000 investment in Amazon stock a decade ago would have been worth more than $124,000 in late 2024. That's almost four times what someone would have if they had invested $10,000 in an S&P 500 index fund ($31,400).
How much does it cost to buy a share of Amazon?
It cost almost $190 to buy a single share of Amazon stock in late 2024. However, some brokerage accounts allow you to invest in fractional shares, so you can purchase less than one share of Amazon (with some brokers allowing an investment of as low as $1).
