In this article, we will look at the 12 Best Diagnostics Stocks to Invest In Right Now.
Overview of the Clinical Diagnostics Market
According to a report by Mordor Intelligence, the clinical diagnostics market has a size of $88.79 billion as of 2025. It is expected to grow at a compound annual growth rate (CAGR) of 5.48% between 2025 and 2030, reaching $115.94 billion at the end of the forecast period. While North America is the largest market in the domain at present, Asia-Pacific takes the lead as the fastest growing.
As per Grand View Research, the growth in the global clinical diagnostics industry is attributed to the rising demand for lab automation and the development of specialized tests for disease management and early disease detection. In addition, the growing use of point-of-care diagnostics products has also driven a decentralization trend in the healthcare industry.
READ ALSO: 7 Most Undervalued Biotech Stocks To Invest In and 11 Best Pharma Stocks to Buy According to Hedge Funds.
AI in Diagnostics Healthcare: Is A New Trend Emerging?
One of the primary trends emerging in the sector is the growing use of artificial intelligence. AI-powered diagnostic tools are revolutionizing the interpretation of medical images with high accuracy, leading to increased adoption. These tools not only improve disease diagnostics but also allow medical professionals to develop more effective and personalized treatment plans, elevating the overall healthcare experience.
On February 24, GlobeNewswire reported that the US AI diagnostics market was worth around $655 million in 2024, as per estimates by Precedence Statistics. It is expected to grow at a CAGR of 20.7% between 2025 and 2034, reaching $4.29 billion by the end of the forecast period.
On February 4, Eric Lefkofsky, founder and CEO of Tempus AI, appeared on CNBC to talk about the impact of generative AI in diagnostics healthcare, among other things. He was of the view that generative AI and large language models aren’t more impactful in any other avenue as much as they are in healthcare. Diagnostics sit at the center of healthcare, as almost every other major decision a doctor makes is undertaken after ordering some kind of laboratory test. If we can make diagnostics more intelligent, it would be possible to route patients to the best possible and most optimal therapy.
Generative AI is thus allowing access to new tools that help structure and make sense of disparate information and use that information, whether it be physician progress notes, pathology reports, molecular data, CAT scans, MRIs, or others, to make sure that the patients are on the optimal therapy path. He further said that the promise of this technology is twofold: it is enormous in helping patients live better and longer lives while reducing the substantial waste in the US healthcare system. Generative AI is thus significantly impactful in healthcare diagnostics.
With these trends in view, let’s look at the 12 best diagnostics stocks to invest in right now.
A technician in a lab inspecting an ELISA test kit for use in biopharmaceutical diagnostics.
Our Methodology
We sifted through stock screeners, financial media reports, and ETFs to compile a list of 20 diagnostics and research stocks. We then selected the top 12 with the highest number of hedge fund holders, as of Q4 2024, and ranked them in ascending order. We sourced the hedge fund sentiment data from Insider Monkey’s database.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12 Best Diagnostics Stocks to Invest In Right Now
12. Medpace Holdings, Inc. (NASDAQ:MEDP)
Number of Hedge Fund Holders: 42
Medpace Holdings, Inc. (NASDAQ:MEDP) is a scientifically driven contract research organization (CRO) that provides clinical development services to the medical device, pharmaceutical, and biotechnology industries. It partners with companies in these domains to develop and execute clinical trials, ranking it on our list of the best diagnostics stocks to invest in right now. The company’s services include clinical trial management, medical department, clinical monitoring, data-driven feasibility, laboratories, quality assurance, and various others. Medpace Holdings, Inc. (NASDAQ:MEDP) operates in the US, Europe, Asia-Pacific, Belgium, and Other geographical segments.
The company reported solid fiscal Q4 2024 results, with revenue growing 7.7% year over year to $536.6 million. Revenue for the full year 2024 also grew by 11.8%, totaling $2.11 billion. In addition, EBITDA for the quarter grew by 39.3% to $133.5 million, accompanied by an improvement in margins to 24.9%. Net income also surged by 49.5%, reflecting the company’s strong operational efficiency.
With a cash position of $669.4 million as of December 31, 2024, Medpace Holdings, Inc. (NASDAQ:MEDP) is well-capitalized to support its business strategy moving forward. In a report released on March 3, Charles Rhyee from TD Cowen maintained a Buy rating on the company with a price target of $370.00. Vulcan Value Partners also expressed bullish sentiments for Medpace Holdings, Inc. (NASDAQ:MEDP) in its Q4 2024 investor letter, saying that the company boasts an excellent operating record, a strong balance sheet, robust free cash flow, and capital allocation history.
Here is what Vulcan Value Partners said about Medpace Holdings, Inc. (NASDAQ:MEDP) in its Q4 2024 investor letter:
“We purchased three new positions during the quarter: Everest Group Ltd., Medpace Holdings, Inc. (NASDAQ:MEDP), and Partners Group Holdings AG. Medpace Holdings Inc. is a top ten global clinical contract research organization (CRO) providing outsourced drug development services. Medpace provides a full-service model attractive to small- and mid-sized biotechnology firms who lack the infrastructure needed to navigate the development process. This customer base is typically less price-sensitive and relies on Medpace to perform end-to-end contract services for drug development. Medpace has an outstanding operating record and has grown revenues and profits at a solid double-digit rate over the last several years. The company produces robust free cash flow and has a strong balance sheet. In addition, Medpace has an excellent capital allocation history.”
