Telemedicine services provider Amwell (AMWL -1.65%) 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.
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.