New Amazon Healthcare Initiative Highlights One of Our Top Profit Plays

Amazon healthcare

News of the "Amazon healthcare" initiative is dominating headlines globally today (Tuesday, Jan. 30), and the announcement highlights one of the biggest profit opportunities we've been telling readers about for years...

This morning, Berkshire Hathaway Inc. (NYSE: BRK.A), JPMorgan Chase & Co. (NYSE: JPM), and Inc. (NASDAQ: AMZN) announced plans to cut costs and improve healthcare for their combined 1.1 million global employees by forming a partnership to provide healthcare services.

The partnership will focus on using technology to provide accessible healthcare at reasonable costs. While the organization will be overseen by the three companies, it is intended to operate independently and be free from any profit-making incentives.

The announcement rocked healthcare stocks in the early hours of Tuesday trading.

Both CVS Health Corp. (NYSE: CVS) and Cigna Corp. (NYSE: CI) sank 5% while Express Scripts Holding Co. (NASDAQ: ESRX), one of the primary providers of pharmacy benefits, dropped 9.7% in response to the disruptive impact the announced partnership could have on the industry. Altogether, the healthcare sector lost a combined $30 billion in market share in the first two hours of trading today.

All because Amazon is now knocking at its door...

We're not surprised. While Berkshire Hathaway and JPMorgan have the resources to make the healthcare industry nervous, it's the threat of Amazon entering the sector that keeps it up at night.

In fact, chaos on Wall Street over the arrival of Amazon in the healthcare industry highlights why Amazon has been one of our top profit plays for years.

Here's why we remain bullish on Amazon stock, and how high we see AMZN stock climbing from here...

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Amazon Healthcare Is the Nation's Best Industry Disruptor

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According to Amazon CEO Jeff Bezos, disruption of the status quo in the healthcare industry is a prime driver behind the company's new partnership with two of the nation's investing stalwarts.

"The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty," Bezos says. "Hard as it might be, reducing healthcare's burden on the economy while improving outcomes for employees and their families would be worth the effort."

Sub out "healthcare" for retail services, video streaming, or fast shipping, and Bezos could be talking about any of the many industries Amazon has entered and completely revolutionized.

Over the last 20 years, Amazon has repeatedly entered into unfamiliar sectors and completely dominated them. That's helped transform the company from a small online book seller with no shares to the third-largest company by market cap in the country.

Currently, the healthcare industry is the nation's largest private for-profit sector, accounting for 13% of the nation's total employment. With Amazon throwing its two decades of experience and immense resources into industry, the opportunity for growth and profit is both exciting and staggering.

Amazon's shares have reacted to the news positively, rising almost a whole percent, to around $1,430. While this may seem high for a single stock that has yet to offer dividends, Money Morning Capital Wave Strategist Shah Gilani thinks this is a great time to jump into Amazon. He sees the stock heading up between 30% and 50% over the next year.

Why? "The easiest, smartest, and most financially rewarding way to play stocks and markets is by riding trends," Gilani says. "That's because trends tend to have longevity, and various momentum boosters can drive them faster and further in the direction they're going."

But Shah isn't the only one who thinks Amazon has room to grow. Money Morning Chief Investment Strategist Keith Fitz-Gerald is going to see some explosive growth this year.

Keith sees Amazon hitting $2,000 before the year is out. "Amazon is knocking the leather off the ball by every metric available," he says. "It's big into data, it's big into shipping fulfillment, it's big into media content - these are things that are firing on all cylinders that the market is hungry for."

We're really excited to see where Amazon goes over the next few months. Here's what we're looking at next...

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