Jim Cramer: Why Apple should buy Epic

With Apple's increasing investments in healthcare, CNBC's Jim Cramer said the company has to make a big move to show it is serious about its business in the industry.

Mr. Cramer, the host of CNBC's "Mad Money," explained that 63 percent of Apple's revenue comes from its iPhone sales. Once those numbers began to dip in 2018, investors wrote the company off, he said.

"It's time for them to make a big, splashy acquisition ... in the software space. The idea here is that this would make [Apple's] service revenue stream a larger piece of the pie," he said. "It would force investors and analysts to re-evaluate Apple as more than just a hardware company."

The most obvious acquisition in the space, Mr. Cramer said, is of EHR provider Epic.

He noted that Epic and its competitors often engage in information blocking, or the refusal to share data between networks, which can lead to issues with patients' and providers' ability to access health records.

However, Mr. Cramer notes that Apple launched its Health Records service last year, which allows iPhone users to access their own medical records from participating hospitals. He said Apple has the potential to act as the middleman between providers and hospitals with different EHR systems.

"If Apple wants to become the universal electronic health records provider, to be the handshake between, say, the [Apple] Watch's data and the [EHR] system, they're going to need to break into this market big, and the best way to do that is by acquiring the best: Epic," he said.

Mr. Cramer also noted that Epic CEO and founder Judy Faulkner has often said she does not plan to take the company public, so a private buyer like Apple could fulfill that wish and keep the company private.

"If [Ms. Faulkner] wants to retire with a bang, selling her company to Apple would be a good way to do it, especially because a deal like this one could potentially be revolutionary for the healthcare sector," he added.

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