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AI Opportunities in Healthcare: 5 Stocks to Watch

AI has the potential to transform healthcare, improving patient care and outcomes. OPTO has selected five AI/healthcare stocks to keep an eye on.

  • GE Healthcare is using Nvidia’s AI technology to accelerate medical imaging.
  • Johnson & Johnson is also working with the chipmaker on integrating AI into surgical devices.
  • AstraZeneca is partnering with Absci to use generative AI to design cancer drug candidates.

Novo Nordisk

The AI Drug Discovery Stock

Novo Nordisk’s [NVO] charitable foundation has announced it is funding an artificial intelligence (AI) supercomputer. Named Gefion, the machine will boast more than 1,500 Nvidia [NVDA] GPUs and will also leverage the chipmaker’s CUDA software service. The goal is to accelerate the research and development of new medicines. Last September, Novo Nordisk signed an AI drug discovery deal with Valo Health worth up to $2.7bn. AI can help to leverage human datasets earlier in the process, “which should lead to a better understanding of target biology,” according to Novo Nordisk Executive Vice President and Chief Scientific Officer Marcus Schindler.

GE HealthCare

The Medical Imaging AI Stock

GE HealthCare [GEHC] and Nvidia have a long-standing partnership when it comes to medical imaging AI. GE HealthCare has used Nvidia’s AI technology to develop SonoSAMTrack, a research model designed to enhance ultrasound images. “Our vision is to accelerate advancements in medical imaging … empowering data scientists to expedite AI application development and eventually help clinicians and enhance patient care,” said GE HealthCare’s Chief AI Officer Parminder Bhatia in a press release.

Johnson & Johnson

The AI Surgical Assistance Stock

Johnson & Johnson [JNJ] is another healthcare stock that has recently inked a deal with Nvidia. Earlier in March, the two parties signed an MoU to advance the integration of AI into surgical devices, allowing for real-time data analysis that can assist surgeons in their decision-making. “Our deep heritage in healthcare and digital ecosystem in surgery and Nvidia’s AI platforms hold enormous potential to create a more connected surgical experience,” said Tim Schmid, Executive Vice President and Worldwide Chairman of MedTech at Johnson & Johnson.


The AI Oncology Stock

AstraZeneca [AZN] signed a deal with generative AI drug creation company Absci [ABSI] back in December. The Anglo-Swedish drugmaker will pay $247m to use Absci’s antibody drug creation platform for developing new treatments in oncology. Absci’s platform leverages generative AI to design cancer drug candidates based on a variety of factors and traits. A month earlier, AstraZeneca launched Evinova, a healthtech business that plans, among other things, to bring AI to clinical trials.


The AI Post-Stroke Care Stock

Medtronic [MDT] has announced a strategic partnership with Viz.ai, a leader in AI-driven disease detection, to improve the care that stroke patients receive in order to reduce the risk of secondary strokes. Care teams will use Viz.ai’s software tool that automates communication between different teams and departments, including neurology and cardiology. “We look forward to helping hospital care teams more easily get patients to the right specialist at the right time,” said Stacey Churchwell, Medtronic’s Vice President and General Manager of Cardiovascular Diagnostics and Services.

Another Way to Invest in AI in Healthcare

The iShares US Healthcare ETF [IYH] holds GE Healthcare, Johnson & Johnson and Medtronic. Pharmaceuticals currently accounts for 31.4% of the portfolio, while healthcare equipment and biotechnology have weightings of 20% and 17.3% respectively. The fund is up 19.1% in the past year through 27 March and up 7% year-to-date.

The VanEck Pharmaceutical ETF [PPH] holds AstraZeneca, Johnson & Johnson and Novo Nordisk. As of 29 February, 95.6% of the portfolio is allocated to healthcare, with consumer staples accounting for 4.2%. The fund is up 20% in the past year and up 10.5% year-to-date.

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