Med tech stocks are ripe for growth due to the advent of artificial intelligence (AI). AI is going to improve healthcare overall. The benefits are expected to be myriad and powerful.
AI is helping physicians identify issues with greater accuracy, ease and speed. The technology can better identify issues for greater scrutiny in scans, as one example. AI is also useful for creating prosthetics and improving healthcare data overall. Further, AI is enhancing visualization during surgery, aiding medical personnel with patients on the table. The list of benefits goes on and on.
The conclusion is clear: AI is likely to propel med-tech stock valuations higher as advances continue.
Intuitive Surgical (ISRG)
Da Vinci manufacturer Intuitive Surgical (NASDAQ:ISRG) is a strong stock to consider overall. The firm is headed in the right direction after pandemic closures and fear, decreased elective surgical procedure volumes. That affected the firm negatively, but it has rebounded nicely and continues to offer strong upside for investors moving forward.
AI is only increasing the potential for Intuitive Surgical and its stock. To date, da Vinci systems have been utilized in over 10 million procedures. Those procedures provided a lot of data for the company. Intuitive Surgical is applying AI/ML methods to that information to provide insights that promise to improve future outcomes. AI is especially relevant to anomalous, complex cases for which a given surgeon may have very little prior experience. AI can guide those surgeons to make better decisions.
Artificial intelligence is also helping surgeons determine the optimal amount of tissue when stapling tissue together. That prevents damage that could otherwise occur through the more traditional method of teaching a surgeon through trial and error.
GE HealthCare Technologies (GEHC)
GE HealthCare Technologies (NASDAQ:GEHC) is a stock spun out of a parent company. It began trading early this year. The shares are well regarded by Wall Street and offer good upside for investors. They also include a modest dividend. Overall, GEHC stock is an interesting investment because it came from General Electric (NYSE:GE), which decided to split certain sectors into other companies.
GE HealthCare Technologies has a very clear opportunity to utilize AI. The company manufactures and distributes diagnostic imaging and radiopharmaceuticals for the imaging needed in certain medical procedures. The company aims to improve patient outcomes by merging leading medical technologies, digital platforms and services. GEHC hired an ex-Amazon machine learning executive to help align research and development segments to technology in order to drive new research and products. Those potential AI advances should lead to growth.
It makes perfect sense as a next step for GE Healthcare, which counts on MRIs and medical equipment for the bulk of revenues. The idea is to provide more personalized care from diagnosis to treatment and AI could help the company reach new heights.
Exscientia (EXAI)
Exscientia (NASDAQ:EXAI) is a good example of a pharmaceutical stock that the AI boom is helping. The firm, like many other pharma firms, is leveraging AI to increase the speed with which it commercializes therapeutics.
One of the biggest opportunities is the drug discovery portion of development. Drug discovery is one of the first stages in bringing a new therapeutic toward commercialization. It is a labor-intensive task in which researchers screen compounds for potential efficacy. The process requires a lot of time and labor and, thus, substantial capital. AI solves that issue. It simply does the task much faster and more efficiently than a human can.
Exscientia is one of the pioneering firms in the sector. The firm opened its automation laboratory during the most recent quarter. It is staffed by leading scientists from top institutions and is in the early stages of development. Revenues are relatively insignificant at this point but Exscientia’s clinical programs are progressing. It has clear potential to carve out a position within the sector.
On the date of publication, Alex Sirois did not hold (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.