In this article, we discuss the 10 buzzing AI health stocks.
The economic impact of AI is projected to be substantial, particularly in regions like China and North America, which are expected to see GDP boosts of 26% and 14.5%, respectively, by 2030, amounting to $10.7 trillion combined. This surge is mirrored in the healthcare sector, where AI is driving transformative growth. According to SNS Insider, the Artificial Intelligence in Healthcare Market, valued at USD 22.5 billion in 2023, is forecasted to reach a staggering USD 370.14 billion by 2032, expanding at an impressive CAGR of 36.5% from 2024 to 2032. This explosive growth underscores the growing role of AI in revolutionizing healthcare through innovations in diagnostics, treatment, and operational efficiency.
The World Economic Forum also points out that AI’s potential in healthcare is particularly promising, given the global shortage of healthcare professionals, projected to reach 10 million by 2030. AI can alleviate the strain by automating routine tasks, reducing physicians’ administrative workloads, and enabling earlier and more accurate diagnoses. This has sparked strong investment from both public and private sectors globally, making AI a key technology in the future of healthcare finance.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
AI’s integration into healthcare is set to not only drive efficiency but also improve patient outcomes through more precise diagnostics and personalized treatment. Companies have responded by heavily investing in AI R&D, and mergers and acquisitions have accelerated the pace of innovation. As healthcare increasingly embraces AI, experts emphasize the potential for even greater transformations. According to Andrew Ng, a pioneer in AI research, “AI will fundamentally shift the healthcare landscape, enhancing diagnostic accuracy and optimizing patient care while reducing costs.”
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and AI News You Should Not Have Missed.
A robotic arm picking up a product assembly line, displaying the company’s consumer healthcare and wellness offerings.
Our Methodology
For this article, we selected trending health stocks that have AI products driving meaningful revenue gains. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Buzzing AI Health Stocks
10. Teladoc Health, Inc. (NYSE:TDOC)
Number of Hedge Fund Holders: 35
Teladoc Health, Inc. (NYSE:TDOC) provides virtual healthcare services in the United States and internationally. It is a pioneer in telemedicine and virtual healthcare, adopting AI to enhance patient care and improve clinical decision-making. AI plays a key role in Teladoc’s virtual care platform, particularly in areas such as remote patient monitoring and chronic disease management. AI-driven tools like Teladoc’s virtual assistant, which helps streamline patient intake and triage, ensure that patients are directed to the appropriate care pathways quickly and efficiently.
The revenue beats for the firm in the past few quarters have been driven largely by its AI-enhanced telehealth services, which saw increased demand during and after the pandemic. The company’s Livongo platform, which uses AI to provide personalized health insights for chronic disease patients, contributed significantly to revenue growth, particularly in diabetes and hypertension management. Teladoc’s AI-driven capabilities have allowed the company to expand its services beyond traditional telemedicine, offering more comprehensive virtual care solutions.
9. Exact Sciences Corporation (NASDAQ:EXAS)
Number of Hedge Fund Holders: 37
Exact Sciences Corporation (NASDAQ:EXAS) provides cancer screening and diagnostic test products in the United States and internationally. The firm is utilizing artificial intelligence to enhance its cancer detection capabilities, especially in colorectal cancer screening. The company’s flagship product, Cologuard, incorporates AI-driven algorithms for analyzing DNA samples to detect early-stage colorectal cancer. Exact Sciences is also expanding its AI capabilities to other types of cancer diagnostics, including lung and breast cancer, through its partnerships with AI firms. By leveraging AI in genomic testing and biomarker analysis, Exact Sciences aims to improve the accuracy and speed of cancer detection, providing patients with more effective and personalized treatment options.
8. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Number of Hedge Fund Holders: 57
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) discovers, invents, develops, manufactures, and commercializes medicines for treating various diseases worldwide. Regeneron is at the forefront of using AI to expedite drug discovery, particularly in its genetic research programs. The company’s AI tools are used to identify genetic mutations linked to specific diseases, accelerating the development of personalized treatments. Regeneron’s AI-driven Regeneron Genetics Center is one of the world’s largest genetic research databases, providing a wealth of data for developing new therapies.
Regeneron’s 2023 financials reflect the success of its AI integration, with the company’s genetic research capabilities, enhanced by AI, have helped drive significant growth, particularly in the development of therapies for retinal diseases and cancer. Regeneron’s ongoing AI investments are expected to support continued revenue growth in the coming years.
7. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 61
Bristol-Myers Squibb Company (NYSE:BMY) is a New York-based pharmaceutical company. The firm has integrated AI in its drug discovery and development pipeline. The company’s AI-driven tools help accelerate research by analyzing complex biological data and identifying potential drug candidates for diseases such as cancer and cardiovascular conditions. The drugmaker has also used AI to optimize its clinical trials, reducing the time and cost of bringing new therapies to market.
In the second quarter of 2024, the firm posted more than $12.2 billion in revenue, a 8.69% increase year-over-year. For the twelve months leading up to July, the revenue was over $46.5 billion, a 2.93% increase year-over-year. The company’s oncology segment, bolstered by AI-powered drug development, contributed significantly to this growth. AI is expected to play a larger role in Bristol-Myers’ future earnings as the company continues to invest in AI-enhanced therapeutic research and development.
6. Cigna Corporation (NYSE:CI)
Number of Hedge Fund Holders: 66
Cigna Corporation (NYSE: CI) is an American healthcare and insurance company. Cigna has utilized AI in its healthcare insurance business to optimize patient care and reduce costs. The company’s AI-driven tools analyze patient data to predict healthcare needs and improve preventive care, helping Cigna manage its healthcare costs more efficiently. Cigna’s AI tools also support telemedicine services, allowing patients to receive care remotely.
The adoption of AI has played a critical role in improving Cigna’s operational efficiencies, reducing costs, and enhancing patient care. The company anticipates further growth as AI becomes more embedded in its healthcare delivery systems, driving both revenue and profitability.
5. Amgen Inc. (NASDAQ:AMGN)
Number of Hedge Fund Holders: 69
Amgen Inc. (NASDAQ:AMGN) discovers, develops, manufactures, and delivers human therapeutics worldwide. Amgen has integrated AI into its drug discovery process, using machine learning to identify new drug targets and optimize clinical trials. AI-driven tools have enabled Amgen to accelerate the discovery of treatments for oncology and cardiovascular diseases, reducing the time and cost associated with drug development. These tools allow the company to analyze massive datasets and predict drug efficacy more efficiently.
Amgen’s AI-driven initiatives have contributed to a revenue increase in 2023. For the fourth quarter of 2023, total revenues increased 20% to $8.2 billion in comparison to the fourth quarter of 2022. For the full year of 2023, total revenues increased 7% to $28.2 billion, resulting from a 9% increase in product sales. This growth was driven in part by new therapies developed using AI tools. Amgen expects further revenue growth as it continues to apply AI to enhance its R&D processes, enabling faster drug development and improved clinical outcomes.
4. Abbott Laboratories (NYSE:ABT)
Number of Hedge Fund Holders: 69
Abbott Laboratories (NYSE:ABT) makes and sells healthcare products. The firm has embraced AI in diagnostics, particularly in its Alinity and FreeStyle Libre systems. The company uses AI to improve the accuracy of its continuous glucose monitoring systems and to enhance its diagnostics platforms. These AI-driven tools help healthcare providers make more informed decisions, improving patient outcomes and reducing the burden on healthcare systems.
In terms of financial performance, Abbott reported $43.1 billion in revenue for 2023, up 7% from $40.3 billion in 2022. The growth was primarily driven by increased demand for its AI-powered diagnostics tools, particularly in the diabetes care segment, where the FreeStyle Libre system saw a 12% increase in sales. Abbott’s continuous investment in AI is expected to contribute to sustained revenue growth as demand for accurate diagnostics rises.
3. HCA Healthcare, Inc. (NYSE:HCA)
Number of Hedge Fund Holders: 69
HCA Healthcare, Inc. (NYSE:HCA) provides health care services in the United States. The company has implemented AI across its network of hospitals to enhance patient care, improve operational efficiencies, and reduce costs. Through AI-powered predictive analytics, HCA Healthcare is able to monitor patient data in real time, predicting potential complications before they occur. The company’s AI tools also streamline administrative workflows, allowing healthcare professionals to focus more on patient care.
In 2023, HCA Healthcare reported $66.9 billion in revenue, an increase from $64.1 billion in 2022. Revenues in the fourth quarter of 2023 totaled $17.303 billion, compared to $15.497 billion in the fourth quarter of 2022. This growth was largely due to the implementation of AI-driven systems, which have improved patient outcomes and reduced hospital readmission rates. HCA expects continued financial improvement as AI further integrates into its hospital operations, driving both clinical and administrative efficiencies.
2. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 84
Pfizer Inc. (NYSE:PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It has been utilizing AI to enhance drug discovery and development processes. The company has invested in AI-driven platforms that use machine learning algorithms to predict drug efficacy and optimize clinical trials. These tools enable researchers to analyze vast datasets, accelerating the identification of promising drug candidates. Pfizer’s AI-driven work in mRNA technology, exemplified by its COVID-19 vaccine, demonstrates how AI can streamline research and development efforts.
1. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 93
Oracle Corporation (NYSE:ORCL) offers products and services that address enterprise information technology environments worldwide. Cerner, acquired by Oracle in 2022, has long been a major player in healthcare IT and is now utilizing Oracle’s cloud-based AI capabilities to enhance its electronic health records (EHR) systems. AI plays a critical role in predictive analytics and clinical decision support tools within Cerner’s EHR systems, allowing healthcare providers to improve patient outcomes by predicting disease risks and streamlining clinical workflows.
Cerner brought in $1.5 billion in revenue in the latest quarter for Oracle Corporation (NYSE:ORCL), boosting growth for the enterprise software giant. The health IT company also generated $5.9 billion in revenue for Oracle’s 2023 fiscal year, which ended May 31. Oracle’s revenue reached an all-time high of $50 billion last year, driven by growing demand for its cloud offerings from companies deploying AI.
While we acknowledge the potential of Oracle Corporation (NYSE:ORCL) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Oracle Corporation (NYSE:ORCL) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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