Just about a month after Amazon (NYSE: AMZN) said that it would acquire One Medical, the company is rumored to be among the bidders for Signify Health. Healthcare seems to be the new battlefront for Big Tech companies and several tech companies have acquired healthcare companies.

In July, Amazon announced the acquisition of telehealth company One Medical for $3.9 billion. The deal valued the company at a significant premium and as expected, 1life Healthcare stock soared after the announcement.

One Medical was the third largest acquisition for Amazon. The biggest was of course its acquisition of Whole Foods which helped the company increase its share in the US grocery market. The next biggest purchase was that of MGM which has helped the company increase the content on its Prime platform.  However, One Medical was the largest acquisition under Andy Jassy, who became Amazon’s CEO last year only.

After One Medical, AMZN announced the acquisition of iRobot which makes Roomba. It was the second billion-dollar deal for the company under Jassy’s leadership. Now, there are rumors that Amazon is among the bidders for Signify Health.

CVS Health, United Health, and Option Care Health are the other companies that are said to be interested in Signify Health. The deal could value Signify Health for more than $8 billion. If Amazon indeed manages to win the bidding war it would be the largest deal under Jassy, and the largest healthcare acquisition by Amazon.

Amazon is Rumored to Bid for Signify Health

Amazon has always been interested in the healthcare space and acquired online pharmacy PillPack. It also acquired Health Navigator to complement its healthcare business. Among other tech companies, Apple, and Microsoft have also acquired tech companies. Apple believes that healthcare would be its “greatest contribution to mankind.”

TikTok parent ByteDance recently acquired a hospital chain in China. The acquisition had raised eyebrows as China has been against tech companies entering into other industries. In 2021, China cracked down on several tech companies, especially in the Edtech space. The country also forced Alibaba to exit its stake in media companies.

Notably, while most other countries are raising interest rates to curb inflation, China has lowered rates twice this month in a bid to boost its sagging economy. The US economy has been slowing down as well as contracted in the first half of 2022.

Amazon Posted Better Than Expected Earnings in Q2 2022

Amazon posted revenues of $121.2 billion in the second quarter, which was 7.2% higher than the second quarter of 2021. While the sales growth was the lowest for the company in over two decades, it was nonetheless ahead of the $119.09 billion that analysts were expecting.

AWS, which is the cash cow for Amazon, posted revenues of $19.7 billion in the quarter, ahead of the $19.56 billion that analysts were expecting. Its advertising revenues of $8.76 billion also surpassed analysts’ estimates of $8.65 billion. The company forecast sales between $125-$130 billion in the third quarter. Analysts were expecting the metric at $126.4 billion.

Wall Street Analysts See AMZN Stock as a Buy

After the Q2 earnings beat several, Wall Street analysts issued bullish notes and advised buying Amazon stock. JPMorgan raised its target price from $175 to $185 while Deutsche Bank raised its from $155 to $175. Goldman Sachs and Piper Sandler also raised Amazon’s target price by $5 to $175.

Wolfe and JPMorgan have listed AMZN stock as a top idea for the second half of 2022. Redburn believes that Amazon’s cloud business has the potential to become a $3 trillion company on its own. However, Anurag Rana of Bloomberg Intelligence believes that AWS (Amazon Web Services) is worth between $1.5-$2 trillion but does not believes that the company will spin off the business.

AWS has been Amazon’s cash cow. Even in Q2 2022, while Amazon’s North America and International cloud operations posted an operating loss, AWS reported record profits.

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