Amazon Stock Pays $0 in Dividends. Here's Why Long-Term Investors Should Own It Anyway.
2026-10-01 06:30
•Will Healy •The Motley Fool
•••••• •••••••• Axe Cap view
Why Amazon’s No-Dividend Strategy Still Matters to Long-Term Investors
Amazon’s choice to reinvest profits rather than pay dividends aligns with strong growth in cloud and AI, offering lessons even for local investors.
Amazon’s refusal to pay dividends might seem odd for a giant with AWS growing 33% and generating most profits. But reinvesting in AI and data centers—projected to hit $220 billion by 2026—has powered capital gains that dwarf what dividends could offer. The company’s 251,000% lifetime return proves ploughing profits back can be far more rewarding than handing out cash. For South African investors, this mindset contrasts with banks like Standard Bank or Nedbank, which prioritize payouts amid slower growth. With the rand’s volatility against the dollar (USD/ZAR), owning a growth story tied to innovation rather than yield-focused stocks might suit those willing to tolerate currency swings in search of bigger long-term gains. Of course, this strategy might falter if Amazon’s investments don’t deliver expected returns or if global economic turmoil hits AWS demand hard. Still, it’s a powerful example of why dividends aren’t the only sign of a healthy investment. this is just our opinion and not financial advice
Watch Amazon through USD/ZAR exposure, considering it a buy for long-term growth if your portfolio can handle currency risk. Avoid chasing local dividend stocks expecting similar returns.
- AMZN
- USD/ZAR
- Amazon’s AI investments underperform
- Rand weakens sharply reducing dollar asset appeal
6/10
Amazon continues to forgo dividend payments despite reaching maturity, instead investing heavily in AI infrastructure and data centers ($220 billion in 2026). The article argues this strategy benefits long-term investors through tax-efficient capital appreciation and strong growth, particularly in AWS which grew 33% and generates 60% of operating income. The company's 251,000% lifetime return demonstrates the effectiveness of reinvesting capital rather than paying dividends.
Our take is based on reporting first published by The Motley Fool.