We recently published a list of the 12 Best Diagnostics Stocks to Invest In Right Now. In this article, we are going to take a look at where ICON Public Limited Company (NASDAQ:ICLR) stands against the other 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.
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).
A laboratory setting with a team of scientists working on a clinical trial.
ICON Public Limited Company (NASDAQ:ICLR)
Number of Hedge Fund Holders: 46
ICON Public Limited Company (NASDAQ:ICLR) is a clinical research organization that provides outsourced development services to the biotechnology, pharmaceutical, and medical device industries. It specializes in managing, developing, and analyzing programs that support clinical development. The company operates in Ireland, the Rest of Europe, the US, and Other geographical segments.
ICON Public Limited Company (NASDAQ:ICLR) showed improved performance from a business development perspective in fiscal Q4 2024, with gross bookings of $3.06 billion increasing 8% sequentially and 3% year-over-year. It also made substantial progress in awards in its biotech business, executing on the improved pipeline and opportunity flow in that division.
Despite a challenging backdrop, ICON Public Limited Company (NASDAQ:ICLR) delivered a 2% revenue growth for 2024, along with adjusted earnings per share of 9.5% both on a full year and year-over-year basis. The company also attained its target free cash flow of $1.1 billion for 2024, an increase of 10% over 2023. In its Q4 2024 investor letter, Diamond Hill Mid Cap Strategy said that ICON Public Limited Company’s (NASDAQ:ICLR) outlook over the long term is favorable. Analysts are also bullish on the stock, and its median price target of $184.87 implies an upside of 35.23% from current levels.
Diamond Hill Mid Cap Strategy stated the following regarding the company in its Q4 2024 investor letter:
“As valuations have continued rising and the economic cycle has gotten relatively long in the tooth, we’ve thought carefully about where and how we are exposed to more cyclical stocks. As such, we initiated a number of new positions in Q4, including ICON Public Limited Company (NASDAQ:ICLR), Informatica, Teledyne Technologies, LPL Financial Holdings, Teleflex Incorporated and Solventum Corporation.
ICON is a leader in clinical trial outsourcing and commercial support and is a key player in the efficient and timely delivery of worldwide drug development for pharmaceutical clients. We believe the outlook over the long-term is favorable and initiated a position during the quarter at a valuation below our estimate of intrinsic value.”
Overall, ICLR ranks 10th on our list of the best diagnostics stocks to invest in right now. While we acknowledge the potential of ICLR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ICLR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
