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While the biggest driver of growth for Amazon (NASDAQ: AMZN) has been coming from its cloud computing division, Amazon Web Services (AWS), the company is not just sitting still when it comes to other areas of its business. It recently set its sights on two rivals to help drive growth in its consumer-oriented business.

Let's take a closer look at these initiatives to see if they can help drive growth and see whether now is a good time buy Amazon stock.

Taking on Temu and Shein

One of the fastest-growing e-commerce apps in the past couple of years has been Temu, owned by China's PDD Holdings (NASDAQ: PDD). The app offers extremely cheap deals on a variety of goods that are sold and shipped directly from China. Rival Shein has also been a fast grower in the apparel category, where it offers discounted apparel that it sources from third-party manufacturers in China.

Looking to capture some of this growth, Amazon recently launched a new app called Amazon Haul to tap into this market. The app features a variety of items with a price cap of $20, but most items are under $10. As with Temu and Shein, Amazon Haul's items will largely come from China-based sellers.

Shipping is free for orders over $25 and will cost $3.99 for orders under that threshold. While Amazon is known for its quick shipping, delivery through Amazon Haul is expected to take between one to two weeks. Items over $3 can be returned within 15 days.

While there is some risk that Amazon Haul could cannibalize its main e-commerce platform, the company is already facing competition in this segment. There has been a lot of controversy around both Temu and Shein over the labor practices of the manufacturers on their platforms and over their customer data collection practices. Amazon said it vets the sellers on its platform, and it is a U.S.-based company. These could be selling points for customers looking to switch over from the two popular apps.

Temu and Shein have been very popular with younger consumers, so overall, Amazon Haul helps the e-commerce leader tap into a new market. However, Amazon's entry into the ultra-low-price China drop-ship segment does come at an interesting time when potential tariffs could start to raise prices on these items. New tariffs have the potential to hurt sites like Temu and Shein, which would likely be to the benefit of Amazon's main site. With the launch of Amazon Haul, however, the company can hedge its bets.

Telehealth

Amazon has also recently set its sights on fast-growing telehealth company Hims & Hers (NYSE: HIMS) and other similar services. The e-commerce giant will start offering upfront pricing for a number of health issues, including ED and men's hair loss. These are two big categories that have helped power Hims & Hers' rapid revenue growth over the past few years.

Amazon has previously tried to make inroads into telehealth with varying levels of success. With this latest move, it looks like it's trying to undercut prices on some popular online pharmacy drugs that are commonly sold by subscription. Amazon had already been offering online doctor visits and selling medications through its Amazon Clinic website, now called Amazon One Medical, since 2023. But this latest effort appears to be a more direct push into subscription sales.

However, Amazon has not started offering popular GLP-1 compounding drugs, which have started to be a big growth driver for Hims & Hers and some other companies. It's also not offering the personalized subscriptions that have helped drive Hims & Hers' growth. Any inroads even in the general subscription business, however, could be a nice growth driver for Amazon given the large base of customers who use its Prime service. And with many traditional pharmacies closing, the company has an opportunity to fill the void.

Is Amazon stock a buy?

The biggest reason to consider buying Amazon continues to be AWS and its efforts in artificial intelligence (AI). The company is investing heavily in AI, and Amazon has a strong history of big investments paying off.

That said, these other efforts represent important opportunities as well. They both target high-growth areas, and with Amazon's large customer base, it has an opportunity to quickly get in on the action.

From a valuation perspective, the stock trades at a forward price-to-earnings (P/E) ratio of under 33, based on analysts' estimates for 2025. That's lower than its historical P/E level.

Data by YCharts.

Given its valuation and the growth opportunities the company has in AI and other areas, the stock remains an attractive investment at current levels.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Hims & Hers Health. The Motley Fool has positions in and recommends Amazon. 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.

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