Amazon's Healthcare Gambit and Cloud Crossroads

Amazon is making a bold move into the weight-loss drug market, launching a GLP-1 management program this week. The service, offered through its One Medical subsidiary, provides virtual care and medication delivery starting at $149 per month for oral treatments. This aggressive foray into telemedicine immediately pressured competitors, with shares of firms like Hims & Hers Health falling roughly four percent on the announcement.

The company's stock, however, remains resilient. Trading at 215.20 EUR, it sits just 2.4 percent below its 52-week high and has gained about 11 percent since the start of the year. This strength persists despite significant investments elsewhere. Amazon recently confirmed an $11.6 billion deal to acquire satellite operator Globalstar and has committed up to $25 billion to AI startup Anthropic, which in turn has pledged substantial spending on Amazon Web Services (AWS).

All eyes are now turning to April 29, when Amazon will report first-quarter results alongside tech peers Microsoft and Google. This date will serve as a critical test for the company's core growth engine. Analysts are particularly focused on whether AWS can sustain its recent momentum. Last quarter, the cloud division grew 24 percent, its fastest pace in 13 quarters. Bank of America now expects Q1 AWS growth of 28 percent, above the broader consensus of 25 percent, citing potential revenue from the Anthropic partnership.

Wall Street's optimism is reflected in rising price targets. Bank of America lifted its target to $298, while KeyBanc set a target of $325, with both firms maintaining buy ratings. KeyBanc analysts project AWS could approach a 30 percent growth rate and see Amazon earning nearly $10 per share by 2027. The overall analyst consensus remains bullish, with 42 of 45 surveyed analysts recommending a buy and an average price target of $286.

Should investors sell immediately? Or is it worth buying Amazon?

This confidence faces near-term challenges. Amazon itself has warned of roughly $1 billion in higher costs for 2026 related to its "Amazon Leo" AI project. KeyBanc also sees operating income under pressure in the first half of next year. Free cash flow has already declined significantly in 2025 due to rising capital expenditures.

For the current quarter, Amazon has provided a wide revenue guidance range of $173.5 to $178.5 billion. Its operating income forecast, between $16.5 and $21.5 billion, is similarly broad, highlighting underlying uncertainty. CEO Andy Jassy's recent sale of approximately 31,000 shares, netting nearly $7.9 million, was executed under a pre-arranged trading plan and is not viewed as a signal of his outlook.

The April 29 report will deliver the first concrete data on the new health initiative's performance and, more importantly, reveal the true strength of cloud demand. With AWS having generated $29.3 billion in revenue in the year-ago quarter, the benchmark is exceptionally high.

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