Your pension is likely invested in some of the largest companies in the world - including Amazon, a key global player in the technology and e-commerce sectors. Current geopolitical events are influencing Amazon’s performance, which in turn affects your pension. Let’s take a look at why this is.
How does Amazon’s performance affect my pension?
Shares represent a unit of ownership in a company. When you buy shares, you become a part owner of that company, and your ownership is proportional to the number of shares you hold.
The value of a share is worked out by taking the company’s value and dividing it by the number of shares in issue. This then forms the individual share price. It’s this share price that goes up and down in value over time. The price can move according to current market conditions, historic performance and potential growth opportunities.
If you were to look closely at your own pension, you’ll see that you probably own a small percentage of many of the world’s largest and most successful companies. The top holdings in your pension refer to the companies you have the largest investment in. For most pension savers, Amazon will likely be one of the top 10 holdings in your pension fund.
What is Amazon?
Amazon was founded in 1994 by Jeff Bezos in Seattle. Starting as an online bookstore, Bezos envisioned a platform that’d offer a vast selection of products. The company’s first website went live in July 1995 and it quickly expanded its offerings beyond books to include electronics, clothing, and much more.
Today, Amazon is the fourth largest company in the world with a market capitalisation (total value) of over $1.9 trillion. ‘Market capitalisation’ is calculated using the present share price multiplied by the total number of shares.
Amazon is also one of the seven leading technology companies in the US (also known as the ‘Magnificent Seven‘) recognised for its innovation and strong performance.
How much of a typical UK pension is invested in Amazon?
Pensions typically put a large portion of your funds into company shares (equities) through the stock market. This strategy aims to grow your wealth over the long term, as company shares are typically one of the best performing asset types.
As Amazon is currently one of the largest companies in the world, it’s a common holding in many pension plans.
While the exact percentage of Amazon in a typical UK pension fund varies, Amazon makes up around 3% of the MSCI World Index, a widely followed global stock market index which tracks the performance of many established companies across 23 developed countries worldwide.
As such Amazon can represent a small percentage of the typical UK pension plan. Current geopolitical events are influencing Amazon’s share price performance, which in turn could affect your pension balance.
How is Amazon affected by President Trump’s tariffs in 2025?
The return of US President Donald Trump has brought renewed attention on tariffs - which are taxes on imported goods. His administration has escalated the trade war with China, announcing a steep 145% tariff on Chinese-made products.
These tariffs have affected Amazon’s supply chain, as the company relies heavily on Chinese manufacturers for a variety of goods sold through its platform. In the table below you can see how short-term uncertainty from US tariffs have shaken the value of Amazon shares. However, the long-term trajectory shows strong growth.
| Company | 3-month performance | 1-year performance | 5-year performance |
|---|---|---|---|
| Amazon | -13% | +5% | +95% |
Source: Market Watch. Data as of 31 March 2025.
A large portion of Amazon sales come from independent sellers, rather than direct sales. Many of these independent sellers are reliant on Chinese manufacturing and have been directly impacted by the tariffs. While the Trump Administration later exempted certain electronic devices from ‘reciprocal tariffs’ - this doesn’t make a significant impact for Amazon’s business model.
These tariffs are part of Trump’s broader strategy designed to reduce the trade deficit and boost domestic manufacturing. With Amazon, it’s the third party sellers who have more control over this situation than Amazon itself. Chinese sellers can choose to hike prices or even exit the US as tariffs damage their profits.
What could make the Amazon share price go up and positively impact your pension balance?
Over the next three months, the share price could rise if:
- Amazon exceeds expectations in its next quarterly earnings report (this looks at the profits and losses for the prior three months). This could lead to a short-term spike in the share price;
- Amazon announces a new product launch or cost-saving update that could excite investors; and/or
- the Federal Reserve, the Central Bank in the US, decreases interest rates. This could boost consumer spending power and encourage businesses to borrow at a lower interest rate and allow them to consume more goods.
Over the next year, the share price could rise if:
- Amazon continues to grow its high-margin businesses, such as Amazon Web Services (AWS), which is a major driver of profitability;
- Amazon successfully expands into emerging markets and gains new customer bases in regions like India, South East Asia, or Africa; and/or
- Amazon introduces new subscription services or enhances existing ones, such as Prime memberships, which could increase customer loyalty and recurring revenue streams.
Over the next five years, the share price could rise if:
- Amazon makes breakthrough innovations in new industries, such as autonomous delivery systems (drones or robots), healthcare services, or artificial intelligence (AI). These could open up entirely new revenue streams;
- Amazon expands its customer base in underdeveloped markets by offering affordable products and services tailored to local needs; and/or
- strong cash flow means Amazon can buy back its own shares and pay dividends, which could help its stock price go up over time.
What could make the Amazon share price go down and negatively impact your pension balance?
Over the next three months, the share price could fall if:
- Amazon misses revenue or profit targets in its quarterly earnings report. This could lead to a ‘short-term sell-off’, as investors react quickly by selling its shares, leading to a short-term decline in the share price;
- supply chain disruptions occur, such as delays in shipping or increased costs due to geopolitical tensions, tariffs, or natural disasters. These could hurt Amazon’s e-commerce operations; and/or
- rising interest rates or fears of a global economic slowdown negatively impact consumer spending, which could hurt Amazon’s retail and cloud businesses.
Over the next year, the share price could fall if:
- Amazon faces increased competition in its core markets, such as e-commerce or cloud computing, from rivals like Walmart, Microsoft Azure, or Google Cloud;
- Amazon’s business practices are targeted by regulations, such as antitrust concerns or labor policies. This could lead to fines or operational restrictions; and/or
- an economic downturn weakens consumer demand, reducing spending and impacting Amazon’s retail sales.
Over the next five years, the share price could fall if:
- Amazon fails to innovate or adapt to changing market trends, risking its position as a leader in e-commerce and cloud computing;
- geopolitical tensions disrupt Amazon’s global operations, such as trade wars or restrictions in key markets like China or India; and/or
- increased competition in the technology sector harms Amazon’s market share, particularly in high-growth areas like cloud computing or AI-driven services.
Conclusion
- Your pension likely has a small investment in Amazon - most pensions invest a portion of your retirement money in Amazon because it’s one of the largest and most successful companies in the world.
- When you invest, you own a portion of the company - the value of these company shares will fluctuate based on market conditions, affecting the value of your pension on a given day.
- Current events can impact your investments - geopolitical events, such as tariffs imposed by the Trump Administration, can affect Amazon’s costs and share price. This in turn impacts your pension balance.
- Politics is short-term and investing is long-term - while current events can cause short-term volatility in share prices, successful investing typically focuses on long-term growth.
Staying informed about current events, and their impact on your pension, can help you invest with confidence - even in a changing market.
Have a question? Get in touch!
Do you want to know more about your pension plan with PensionBee? You can check out our Plans page to learn how your money is invested in different assets and locations, or log in to your BeeHive to see your specific plan. You can always send comments and questions to our team via engagement@pensionbee.com.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
