Amazon, Inc. AMZN is reportedly planning to shut down its primary healthcare service unit by the end of 2022. The reports come on the heels of the e-commerce giant agreeing to buy 1Life Healthcare, Inc. ONEM, which operates a chain of primary healthcare clinics under the brand name “One Medical.”
Commenting on this, Loup Funds’ Gene Munster said he believes Amazon is still committed to healthcare. The decision to shut down Amazon Health Services may have to do with its redundancy to One Medical, he added.
The venture capitalist noted that One Medical has the momentum, with 790,000 members compared with an estimated 15,000 enrolled for Amazon Care.
“Healthcare still has the greatest potential as the fourth leg of Amazon’s growth story,” Munster said.
The tech company’s current growth drivers are its core e-commerce business, cloud computing and Prime video streaming service.
Amazon’s interest in healthcare would be related to logistics, testing and primary care, and potentially expanding to providing insurance, Munster had said in a note in early August.
Assuming Amazon and Apple, Inc. AAPL capture 2% of the total addressable U.S. healthcare market, estimated at $4 trillion, these two big techs can rake in revenue of $80 billion in the near term, which could potentially grow to $125 billion in a decade, he added.
“Wellness is a big enough market to move the needle for both tech giants,” he had said at the time.
Price Action: Amazon shares closed Thursday’s session 2.60% higher at $137.28, according to Benzinga Pro data.
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