While the pairing of artificial intelligence and healthcare may sound like something straight out of a science fiction movie, there are several avenues through which the high-speed data processing offered by AI can improve patient outcomes. From more precise diagnosis to pandemic modeling, the large-scale algorithmic models we call AI can help the world of medicine immensely. As such, AI healthcare stocks could become a new subsection of the stock market that blends the growth of tech and biotech stocks.
Though still largely speculative, AI healthcare stocks should receive an evaluation for the number of people and conditions their companies can address with AI technology. Moreover, the vast oceans of health data collected to train such healthcare AIs are exceptionally valuable. Thus, AI healthcare stocks derive value from operations and data assets on patient populations. Considering this, here are three such stocks that could be big players in the future of health services.
Recursion Pharmaceuticals (RXRX)
One of the more substantial AI healthcare stocks, Recursion Pharmaceuticals, (NASDAQ:RXRX) aims to transform clinical-stage biotechnology through algorithmic applications. The company’s thesis on achieving this is a cross between the fact that drugs continue to take longer and more money to produce while computing increases and gets cheaper.
However, investors should note that RXRX is an early-stage pharmaceutical company. This means it lacks a proven track record of marketable drugs. Its value lies in its proprietary software platform that automates wet lab experiments and data collection. This innovation has enabled RXRX to compile one of the world’s largest biological and chemical datasets for research.
RXRX aims to revolutionize the overall drug research and production process by applying supercomputing technology alongside custom-trained AI. The company has also had a rocky two years since going public, but its low price means it could be a steal once its projects mature. These factors combine to make it one of the better AI healthcare stocks to consider.
Novartis (NVS)
One of the world’s most successful Swiss pharmaceutical companies, Novartis (NYSE:NVS), has quietly worked AI into its processes over the last few years. The company is a dominant biochemical developer, employing some of the best chemists in the world to bring over 90 different products to market across almost all applications.
To propel itself further into the future, Novartis uses AI for three distinct applications: Generative Chemistry, AE Brain and AI Nurse. Its Generative Chemistry section aims to assist its research scientists by using machine learning to scan through databases of potential molecular structures from which to create new pharmaceuticals. Its AE brain process quickly consumes and parses text documents containing warnings about a potential chemical compound. And finally, its AI Nurse platform supports patient engagement for individuals suffering from heart disease.
This combination of services shows that Novartis is one of the top AI healthcare stocks to invest in due to its broad approach to the industry and its intent to develop the technology for patient applications continuously.
Medtronic (MDT)
Potentially one of the most innovative AI healthcare stocks on the market today, Medtronic (NYSE:MDT) is one of those companies that flies under the radar for most but is doing amazing things behind the scenes. Since the company’s primary focus is technology development for healthcare applications, it shouldn’t be surprising that its AI projects are well ahead of the competition.
One of its most promising projects is the GI Genius, an AI-based endoscopy module. This is essentially a computer algorithm-aided detection system that is more likely to find patterns of colorectal polyps during a colonoscopy, which the physician may miss while moving through the scan. As such, it helps increase the survival likelihood of individuals who develop colorectal cancer by catching polyps early before they become too dangerous.
For investors, technologies like these should be a green flag that Medtronic is a buy. As the broader healthcare industry adopts AI, the companies instrumental in developing the specialized software will have the most to gain.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.