CVS vs. Amazon: Healthcare Battle Continues- Which Stock to Buy Now?
Amazon 's AMZN entry into healthcare was once seen as a major existential threat to traditional players like CVS Health CVS. From its 2018 acquisition of PillPack to the rapid expansion of Amazon Pharmacy, AI-powered prescription fulfillment, RxPass discounts for Prime members, and even drone-based drug delivery, Amazon has quickly shaken up the retail pharmacy landscape, prompting investor concerns about the long-term viability of brick-and-mortar drugstores. Its recent moves into diagnostics in India and AI-enhanced primary care via One Medical have only reinforced its ambition to redefine healthcare as a logistics- and data-driven service.
But CVS hasn't stood still. After a tough 2024 marked by cost headwinds at its Aetna insurance unit, the company is staging a strong comeback in 2025, now among the top 10 S&P 500 performers year to date. In the first quarter of 2025, CVS posted $95 billion in revenue and continued expanding its vertically integrated ecosystem, including Oak Street Health clinics, Aetna's Medicare Advantage plans and over 9,000 retail locations.
What once looked like an asymmetrical battle is now shaping into a true rivalry. With Amazon driving digital-first, scalable models powered by generative AI and logistics strength and CVS focusing on integrated care and physical access, investors are currently watching closely to see who will ultimately lead the next era of healthcare delivery. Let's discuss in detail.
Physical Footprint vs. Digital Deployment
CVS Health continues to capitalize on its vast physical footprint, boasting over 9,000 retail pharmacies across the United States, alongside its insurance arm, Aetna, and a growing network of Oak Street Health clinics. This infrastructure enables CVS Health to offer coordinated, in-person care with integrated logistics, pharmacy, and insurance services under one umbrella. The company's ability to deliver both routine and specialized care locally makes it a go-to player for communities seeking trusted, comprehensive healthcare access.
In contrast, while it lacks a clinic network, Amazon is leaning into its core strength, logistics. Its recent launch of at-home diagnostics in six Indian cities via a partnership with Orange Health sent shockwaves through the market, triggering concerns for local diagnostics giants. By integrating test booking directly into its app, Amazon is building a tech-enabled healthcare layer on top of its existing consumer base and delivery infrastructure, reinforcing its push toward frictionless, on-demand healthcare.
Integrated Clinical Model vs. Tech-Fueled Efficiency
CVS Health is building a vertically integrated healthcare ecosystem that brings together insurance (Aetna), pharmacy services, and care delivery, offering patients a cohesive, end-to-end experience. In Q1 2025, CVS Health reported that Medicare Advantage members who use CVS pharmacies experienced 3% lower medical costs, a reflection of stronger medication adherence and care coordination.
Amazon, meanwhile, is pursuing a modular, tech-driven approach. Through Amazon One Medical in the United States, the company is embedding generative AI tools, such as Amazon Web Services (AWS), HealthScribe and Bedrock, directly into clinical workflows, slashing physicians' administrative time by around 40%. Beyond primary care, AWS is expanding its healthcare footprint with AI-powered solutions in diagnostics, medical coding, drug discovery, and operational efficiency. Rather than integrating care under one roof, Amazon is redefining each function with digital tools that emphasize productivity, scalability, and user experience.
CVS Eighth on the S&P 500 Chart, AMZN at No. 262
After a rough 2024, marked by high utilization at its Aetna insurance unit, as well as reimbursement pressure, CVS Health has experienced a dramatic recovery so far in 2025. The stock has become the S&P 500's eighth-best performer, with a year-to-date return of 56%, thereby outperforming all other index members by a significant margin. Amazon, on the other hand, is at number 262 on the chart with a 1.8% gain. These compare to the benchmark's 5.1% rise during this period.
YTD Price Performances of CVS and AMZN
Comparing EPS Projections: CVS Health & Amazon
The Zacks Consensus Estimate for CVS' 2025 earnings per share suggests a 12.7% improvement from 2024.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AMZN's 2025 EPS implies an improvement of 12.5% over the previous fiscal.
CVS is Attractively Valued Than AMZN
CVS is trading at a forward 12-month price-to-earnings, which is a commonly used multiple for valuing healthcare stocks, of 10.48X, above its five-year median of 9.45X. Meanwhile, Amazon is presently trading at a forward 12-month price-to-earnings of 33.3X, which is below its five-year median of 55.1X.
This suggests that while CVS may appear slightly elevated compared with its own historical average, it remains attractively valued relative to CVS.
Buy CVS Now, Hold AMZN
While Amazon is making bold, tech-driven plays in healthcare, CVS Health is firmly holding its ground with a focused, integrated strategy. Backed by a Zacks Rank #2 (Buy), CVS is outperforming the market in 2025 through strong Medicare Advantage growth and disciplined execution. Amazon, a Zacks Rank #3 (Hold) stock, remains an innovator, but its healthcare efforts are still maturing and carry greater execution risk. For near-term earnings prospects and sector leadership, CVS stands out as the better investment today. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here.
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