The Next Trillion-Dollar Tech Takeover

Lou Basenese

Thursday, August 4, 2022

I’ve said it here before: Tech companies are not just tech companies anymore. They’re expanding into every aspect of our lives.

And we keep getting more and more proof…

Consider: In recent weeks, Amazon.com, Inc. (AMZN) plunked down $4 billion to bolster its presence in the healthcare market.

That’s not a typo. The $1.4 trillion market cap online retail and cloud-computing giant wants to be involved in managing your health.

Should we be concerned about it? Heck, no!

If anything, it’s another major buy signal for this burgeoning mega-trend.

Let me explain…

Forced Adoption Strikes Again

For many industries, the pandemic stopped business in their tracks. But for telehealth services, it catalyzed a massive and enduring growth trajectory.

Consider…

Depending on the survey, anywhere from 50% to as many as 85% of U.S. physicians now report treating patients via telemedicine.

That’s a major increase from the 18% reported in 2018. And yet, we’re still just scratching the surface here.

More specifically, the global telemedicine market is expected to increase nearly 4x by 2026. Longer term, it represents a $600 billion market.

But if we look at the trend in the context of the broader healthcare market, the expansion opportunity for telehealth is essentially endless.

That’s no exaggeration, either, because the global healthcare market generates in excess of $12 trillion in revenue. Every year!

With that critical market perspective, Amazon’s moves make eminent sense…

After retail, which generates over $25 trillion in revenue every year, healthcare is the next biggest and most vital market.

And by scooping up 1Life Healthcare (ONEM), which is also known as One Medical, Amazon gets a booming concierge-medicine practice with a meaningful brick-and-mortar footprint, which it can use to scale quickly.

Or as The Information reported, “The move is reminiscent of the e-commerce giant’s 2017 acquisition of Whole Foods, which helped Amazon rapidly scale up in a new market by acquiring a large brick-and-mortar presence in areas where it already had a sizable customer base.”

Indeed!

With One Medical, Amazon instantly gains access to new employer clients and direct access to consumers, including Medicare patients for Amazon Care.

Not the Only One

Of course, Amazon isn’t the only one with its eyes set on the growth potential and profits in the telehealth industry.

As I’ve shared ad nauseum here, the formula for making the most profits as a trend trader is to invest early. And arguably, there are no better early investors than venture capitalists.

And guess what? They’re plowing money hand-over-fist into the telehealth industry right now. A whopping $18 billion in 2021 alone.

So from a timing perspective, although it might seem too late, it’s actually early — and prime for investing.

Put another way, the market for telehealth is still massively underpenetrated.

Case in point: The leading telehealth provider Teladoc Health, Inc. (TDOC) expects to provide 19 million visits in the U.S. in the coming year. Yet, that barely scratches the surface of the 850 million outpatient visits, plus 300 million additional mental-health specific visits each year in the country, according to Cowen analysts.

The safest way to play this and future mega-trends would be to scoop up shares of Amazon.

Why? Because Amazon’s expansion into the healthcare market underscores its key differentiator: the ability to leverage a technology platform to rapidly scale into and profit from new, completely unrelated markets.

I’d argue that no company possesses a more robust and adaptable platform than Amazon to penetrate any market. High-or low-margin.

The only one that comes close is Apple Inc. (AAPL), which we all know is the only other FAANG stock I consider a “no brainer” buy on every dip.

As far as more speculative, pure-play ways to invest in the burgeoning telehealth mega-trend, I’m on the lookout for fresh opportunities to share as a Trend Trader Pro “Trade of the Week” idea.

So make sure you’re signed up here and stay tuned!

Ahead of the tape,
Lou Basenese
Lou Basenese

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