3 reasons that make Amazon an even more attractive investment
Internet retail giant Amazon $AMZN-1.1% probably doesn't need any special introduction to anyone, but what is worth analyzing are their recent activities, which are definitely worth it. Amazon has a lot of capital, which it is working wisely with and is steadily progressing, also thanks to the diversification of its business activities, which I will cover in this post.
Amazon's 3 recent activities that still make it a very attractive investment.
These 3 activities consist of two acquisitions and one very interesting partnership that will surely please a large part of the population and a number of organizations. Amazon is making steady progress, as evidenced by its recent acquisition of 1Life Healthcare $ONEM and the now fairly well-known acquisition announcement we mentioned on Bulios in connection with iRobot $IRBT-3.8% . Therefore, let's take a closer look at these recent activities.
1. Acquisition of 1Life Healthcare $ONEM
Amazon recently announced an interesting acquisition worth approximately $3.9 billion, namely the purchase of the aforementioned 1Life Healthcare, also known as One Medical. The company is subscription-based and comes from the healthcare space, which Amazon has had in its crosshairs for quite some time. The company has developed a healthcare membership model based on direct-to-consumer enrollment as well as third-party sponsorships. Their membership model includes seamless 24/7 access to digital health services, coupled with an invitational clinic that is normally covered under health insurance plans. The company also offers administrative and management services through contracts with physician-owned specialty societies or One Medical Entities.
As stated in Amazon's press release about the acquisition, "One Medical combines in-person care in inviting offices across the country with digital health and virtual care services." Telehealth services have been rising in popularity and popularity even during the pandemic, with virtual healthcare companies seeing significant growth.
In the event of a successful acquisition, Amazon will take control of 200 offices and approximately 770,000 patients nationwide, which would represent a significantly higher reach than competitor Teladoc. It may not stay at this but as Amazon has a diverse range of products and can use this company to implement its own technologies that would make the whole process more efficient. Some of these benefits include: a quality and unrivalled delivery infrastructure and an established subscription service of over 200 million members worldwide, which is a really big audience. The pharma business is a strong and difficult sector but a giant like Amazon will have no problem with it in my opinion.
2. The acquisition of iRobot $IRBT-3.8%
In August, Amazon announced plans to acquire iRobot, a consumer robotics company. This acquisition is expected to be worth approximately $1.7 billion. This acquisition fits more into Amazon's model compared to One Medical, but sometimes those less traditional decisions can have incomparably more success. As I mentioned, this acquisition fits more into the business model, as Amazon has already penetrated from the smart devices sector, for example: the range of Alexa-enabled products - smart speakers, cameras, alarm clocks or thermostats. In addition, this new range also fits into their robotics sector, where they want to continuously strengthen their portfolio.
Amazon can turn interesting software into billion-dollar businesses, a prime example of which is the aforementioned Alexa, where they created Alexa Skills - which generates them 100s of millions of dollars a year. The iRobot acquisition only increases the variety of smart products and Alexa Skills that the company could offer, which could pay off significantly for Amazon. If you're intrigued by this acquisition, you can read a comprehensive article from a fellow community member: What does Amazon promise from its latest $1.7 billion acquisition?
If you're interested in this acquisition, you can watch an opinion video.
3. Net collaboration $PLUG+2.1%
Amazon has taken a significant step towards achieving its goal in conjunction with the net-carbon-zero goal. One of Amazon's goals is to build a greener and cleaner future, and they are clearly going for it. It also wants to achieve this goal by working with Plug Power and incorporating hydrogen as an energy source. The gist of the deal is to supply nearly 11,000 tons of hydrogen per year, starting in 2025. Both companies say the deal will provide enough energy to run 800 heavy-duty trucks and 30,000 forklifts. Amazon wants to be a leader and role model in the transition to cleaner energy sources.
"Amazon is proud to be an early adopter of green hydrogen because of its potential to decarbonize hard-to-reduce sectors such as long-haul trucking, steel manufacturing, aviation and marine," said Amazon's vice president of Worldwide Sustainability.
"Plug is fully committed to advancing the future of green hydrogen and we are building a complete hydrogen ecosystem - from molecules to applications combined with a robust network of green hydrogen plants around the world - to make it easier for companies looking to reach the grid to adopt hydrogen. " - Said Plug Power's CEO, subsequently adding: "Securing this significant green hydrogen supply contract with a customer like Amazon validates our multi-year investment and strategic expansion into green hydrogen."
Marsh, for Plug Power, noted that they could expand the collaboration with Amazon to include other alternative applications of hydrogen, such as: electric trucks. Which I don't know if it will be successful, though, since I wrote a post yesterday about Rivian, where they struck a deal to supply electric vehicles An automaker with the potential to dethrone Tesla? With 10X potential and a partnership with Amazon
This is what we call a WIN-WIN collaboration, as Amazon is pushing more alternative energy sources and we know Amazon is a leader and role model for a lot of companies, and it's also a super deal for Plug Power, who have said their new collaboration with Amazon will help them increase revenue to $3 billion by 2025 - up from nearly $600 million in the last 12 months. It will also support Plug Power's goal of producing 500 tons of liquid green hydrogen per day in North America.
That Amazon is playing its part in promoting clean and renewable energy is confirmed by the fact that it is the largest corporate purchaser of renewable energy. They also co-founded The Climate Pledge, a commitment to achieve zero net carbon by 2040. Since then, more than 300 other companies have made the same commitment, including major corporations like Microsoft and Verizon.
In addition to recent acquisitions, the company has several promising opportunities on the horizon that should excite investors. Amazon's advertising efforts have proven particularly fruitful for the company, as the segment generated $33.9 billion in revenue over the past four quarters, and the company is gearing up to dig deeper into the industry. Amazon has a bright future ahead of it and investors should be optimistic about its stock as its promising outlook makes it an excellent long-term buy, but of course this is just informative and not investment advice, so if you are considering investing in Amazon do your own research yet.
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