In this article, we will take a look at the top 5 medical AI companies. To see more such companies, go directly to Top 12 Medical AI Companies.
5. Medtronic plc (NYSE:MDT)
Market Cap: $101.3B
Medical device company Medtronic plc (NYSE:MDT) ranks 5th in our list of the top 12 medical AI companies. Earlier this year Medtronic plc (NYSE:MDT) partnered with Nvidia. Under the partnership, NVIDIA healthcare and edge AI will be integrated into Medtronic’s GI Genius™ intelligent endoscopy module, developed and manufactured by Cosmo Pharmaceuticals.
Appleseed Fund made the following comment about Medtronic plc (NYSE:MDT) in its Q1 2023 investor letter:
“During the most recent quarter, Appleseed Fund added three new equity holdings: Medtronic plc (NYSE:MDT), Stanley Black & Decker (SWK), and Synovus Financial (SNV). Medtronic is the world’s largest device manufacturer, and it holds the number one or number two market share in most of its product segments. Medtronic’s business is heavily weighted towards complicated in-patient procedures, which are typically quite profitable. Industry dynamics are quite attractive with an aging global population and the growth of improved healthcare in emerging markets; furthermore, most of its segments are highly concentrated with just 2-3 players that split each segment’s market share, affording the key participants with significant economies of scale and pricing power. The Company has been recently addressing several temporary headwinds including a strong dollar, inflation, a delayed recovery in surgical volumes from the coronavirus pandemic, and supply chain issues. Once these issues reach the rearview mirror, the Company’s growth and margin expansion plans should transform into reality.”
4. Stryker Corporation (NYSE:SYK)
Market Cap: $104.2B
Medical device company Stryker Corporation (NYSE:SYK) uses AI and machine learning in its platforms. Stryker Corporation (NYSE:SYK)’s CEO Kevin Lobo in 2022 said in an interview that the company is going all-in on AI. He said Stryker Corporation (NYSE:SYK) was already using AI for procedures like surgery preparation and patient monitoring. The executive talked about the technology developed by Gauss Surgical, which was acquired by Stryker Corporation (NYSE:SYK). He said that Gauss’s AI technology helps doctors see how much blood a patient has lost using AI systems.
ClearBridge Large Cap Growth Strategy made the following comment about Stryker Corporation (NYSE:SYK) in its second quarter 2023 investor letter:
“Supporting our widely-held names in the second quarter were solid contributions in health care, where we benefited from an overweight to medical device stocks Intuitive Surgical and Alcon which moved higher on signs of improving procedure growth. Supply chain headwinds and labor shortage bottlenecks are now easing while ambulatory surgery centers are adding more surgery hours, which should be a boon to these stocks as well as to orthopedic and spine surgery products specialist Stryker Corporation (NYSE:SYK).”
3. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Market Cap: $104.6B
Intuitive Surgical, Inc. (NASDAQ:ISRG) has been using AI and machine learning in the development of its surgical robots for several years. Intuitive Surgical, Inc. (NASDAQ:ISRG)’s da Vinci robotic surgical system uses AI and machine learning technologies.
As of the end of the second quarter of 2023, 68 hedge funds tracked by Insider Monkey had stakes in Intuitive Surgical, Inc. (NASDAQ:ISRG). The biggest hedge fund stakeholder of Intuitive Surgical, Inc. (NASDAQ:ISRG) during this period was Ken Griffin’s Citadel Investment Group which owns a $664 million stake in the company.
Baron Health Care Fund made the following comment about Intuitive Surgical, Inc. (NASDAQ:ISRG) in its second quarter 2023 investor letter:
“Strength in health care equipment was largely due to the outperformance of sleep apnea device company Inspire Medical Systems, Inc. and robotic surgery system pioneer Intuitive Surgical, Inc. (NASDAQ:ISRG). Intuitive Surgical, Inc. manufactures and markets the da Vinci Surgical System, a robotic system used for minimally invasive procedures. Shares increased after Intuitive reported strong first quarter financial results highlighted by a 26% increase in procedures and raised guidance for 2023. These results, which came in well above Street estimates, were driven by strength in general surgery procedures in the U.S. and non-urology procedures outside the U.S. We continue to believe Intuitive has a large opportunity to expand the use of robotic surgery over time.”
2. Pfizer Inc. (NYSE:PFE)
Market Cap: $187.2B
Being a leader and dominant player in the industry gives Pfizer Inc. (NYSE:PFE) an edge in the market when it comes to the AI race. Pfizer Inc. (NYSE:PFE) is pouring resources and money to use AI to optimize its operations, technology and drug pipeline. Pfizer Inc. (NYSE:PFE) is developing an “ML Research Hub” to create predictive models and tools for drug discovery.
Diamond Hill Large Cap Strategy made the following comment about Pfizer Inc. (NYSE:PFE) in its Q2 2023 investor letter:
“Our bottom contributors in Q2 included health insurance company Humana, biopharmaceutical company Pfizer Inc. (NYSE:PFE) and global entertainment company Disney. Pharmaceutical giant Pfizer has been dealing with a decline in sales due to lower COVID vaccination levels. Additionally, in 2023, management is increasing spend as the company invests in new product launches. That said, we remain positive about the long-term company fundamentals.”
1. UnitedHealth Group Incorporated (NYSE:UNH)
Market Cap: $485.6B
UnitedHealth Group Incorporated (NYSE:UNH) acquired Optum back in 2011. Optum uses technology and AI for decision making and predictive analysis. In 2020 UnitedHealth Group Incorporated (NYSE:UNH) launched Level2 digital therapy platform for diabetes patients. UnitedHealth Group Incorporated (NYSE:UNH)’s virtual assistance platform uses conversational AI and AI tech to route calls and optimize customer support resources.
Answering a question about the use of AI during an earnings call, the company’s Chief Operating Officer Dirk McMahon said:
“… we’ve really been applying a lot of artificial intelligence, machine learning and natural language processing. Long-term, we think there’s great hope for those. And some of the short-term things that we’re working on in those areas, like using generative AI to help more efficiently write medical appeal letters, things like optimizing our provider search and all of our digital properties with natural language processing and AI, doing a lot of work, improving our payment integrity models, using AI to detect waste, fraud, and abuse. And then a lot in the G&A world to answer basic questions in our call centers, like leveraging our benefit bots to reduce the number of calls and the labor associated with that, for simple questions like is XY or Z disease covered or have I met my deductible.
From a long range perspective, however, I’m really optimistic about our significant data sets. Our ability to take advantage of whatever new technology comes down the pipe to improve health care, I’m really excited about it.”
Read the full earnings call transcript here.
Mairs & Power Growth Fund made the following comment about UnitedHealth Group Incorporated (NYSE:UNH) in its second quarter 2023 investor letter:
“Notable detractors to performance in the first half were US Bank (USB), Charles Schwab (SCHW), and UnitedHealth Group Incorporated (NYSE:UNH), which were down 22.09%, 31.65%, and 8.65%, respectively. Another detractor from relative performance was UnitedHealth Group, which was down 8.65%. However, we have a positive long-term view of the company, headquartered in Minnesota, and especially its potential when it comes to harnessing its vast amounts of patient data via AI. Additionally, its Optum unit, which provides technology and data-driven care delivery, has AI-enabled tools that can help healthcare providers drive more efficient and accurate care to patients.”
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