Markets

Google Telehealth Partner Amwell Zooms 28% Higher in First Days of Trading

Telemedicine services provider Amwell (NYSE: AMWL) was a star on the stock market Thursday and Friday. Making its debut on the New York Stock Exchange on the former day just after its initial public offering (IPO), it rose nearly 30%, and the following day its price dropped only slightly.

Amwell's popularity seems to spring from two sources. First, investor demand for IPOs generally, and tech-flavored IPOs specifically, is very strong right now.

Secondly, other operators active in the telehealth segment -- Teladoc is the best example -- have been have been posting impressive growth in operational metrics and certain financials lately. This is due, of course, to the stay-in-place measures mandated or encouraged by authorities in the face of the coronavirus pandemic.

Woman consulting with her doctor via tablet computer.

Image source: Getty Images.

Another factor raising Amwell's profile is the direct involvement of Alphabet's (NASDAQ: GOOG)(NASDAQ: GOOGL) Google Cloud unit.

Alphabet/Google Cloud is investing $100 million in a stake of Class C Amwell shares, an amount that buys it the official title of "preferred global cloud platform" of the telemedicine specialist. Additionally, according to Alphabet, Google Cloud and Amwell will collaborate in the research and development of new technologies in the segment.

While telemedicine is growing rapidly in prominence within the healthcare sector, it is still relatively young. That, combined with the capital expenditures needed to walk the cutting edge of the technology that underlies it, makes many operators unprofitable. Amwell is no exception; however, its revenue has been rising at a sprightly pace and, given the durability of the pandemic, might very well continue to do so.

10 stocks we like better than American Well Corporation
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and American Well Corporation wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of August 1, 2020

 

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Teladoc Health. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

AMWL GOOGL GOOG TDOC

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More