How to Trade Amazon (AMZN)

Jeff Bezos left the D.E. Shaw hedge fund in New York after seeing statistics that web usage was growing 2,300% per year. He drove across the country to Seattle, writing the business plan on the way. He founded 'Cadabra' (later renamed Amazon) on July 5, 1994. His parents invested $245,573—Bezos told them there was a 70% chance of failure.

Amazon.com opened on July 16, 1995, offering titles for almost every DVD available at the time. Within its first month, it sold books to 45 countries. By the end of 1996, revenue reached $15.7M. Despite continuous losses, Bezos reinvested every cent back into growth.

Amazon IPO'd on May 15, 1997, at $18/share, raising $54M with a $438M valuation. Bezos warned investors that Amazon would focus on long-term growth rather than short-term profit. Amazon did not turn a profit until 2003—six years after the IPO—but investors who held through the dot-com bust became millionaires in the following decade.

Amazon Web Services (AWS) launched in 2006, allowing developers to rent computing power on-demand. The concept arose because Amazon had to build its own infrastructure to scale—why not sell it to others? AWS became the most profitable segment, reaching a $100B+ revenue run rate by 2024.

Jeff Bezos stepped down as CEO in July 2021, on the 27th anniversary of Amazon's founding. Andy Jassy, the former CEO of AWS, took his place. Today, Amazon spans e-commerce, cloud, logistics, AI, satellite internet (Kuiper), and autonomous vehicles (Zoox), becoming a tech conglomerate that touches the entire economy.