Artificial intelligence has enhanced many industries, including health care. Health professionals can access a wider range of tools and additional data points on each patient with AI. This information can help professionals pinpoint conditions, prevent diseases from spreading, monitor patients, prescribe drugs and tackle administrative tasks.
AI will continue to enhance the health care industry and help prevent staff burnout, and that presents a compelling long-term opportunity for patient investors. Health care companies will make big investments in AI resources, and some of that cash can flow into your pocket.
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These are eight of the best AI health care stocks to buy:
| AI Health Care Stock | YoY Revenue Gain for Q3 |
| Alphabet Inc. (ticker: GOOG, GOOGL) | 15% |
| Amazon.com Inc. (AMZN) | 11% |
| International Business Machines Corp. (IBM) | 1% |
| Eli Lilly and Co. (LLY) | 20% |
| Medtronic PLC (MDT) | 5%* |
| Stryker Corp. (SYK) | 12% |
| Boston Scientific Corp. (BSX) | 19% |
| Abbott Laboratories (ABT) | 5% |
*Most recent quarter, Q2 FY2025.
Alphabet is the parent company behind Google and YouTube, and it’s also a leader in the AI industry. The tech giant uses artificial intelligence in practically every component of its business and has stored a lot of data over the years. That fact alone gives Alphabet a big head start on any AI venture, including Google Health.
Google Health is a resource that empowers people with the information they need to act on their health. The company is working on using AI to help with diagnosing diseases, preventing blindness and tackling other health care challenges.
Investors initially worried that Alphabet would fall behind in the AI race and cede ground to Microsoft Corp. (MSFT), but the company has continued to deliver impressive earnings reports. Alphabet delivered 15% year-over-year revenue growth in Q3 2024, with Google Cloud posting a 35% year-over-year revenue gain due to AI tailwinds.
Amazon.com Inc. (AMZN)
Amazon has similar opportunities to Alphabet in the AI industry: in cloud computing, targeted advertising and search engines, for example. However, the company has also made investments in health care. For instance, AWS HealthScribe lets users automatically create clinical notes from patient-clinician conversations with generative AI. AWS HealthScribe is a HIPAA-eligible service as well.
That’s not the only product Amazon offers in the health care industry. AWS recently partnered with EvolutionaryScale to advance health care via sophisticated protein research. According to the AWS sites, this technology can help researchers “generate complex, multi-domain proteins from scratch, create protein design workflows and incorporate functional understanding.”
Amazon’s revenue jumped by 11% year over year in the third quarter, while net profit margins came close to 10%. Amazon’s health care ambitions may lead to even more impressive financial results in the future.
International Business Machines Corp. (IBM)
IBM has been enhancing its AI supercomputer, Watson, for many years to make inroads in health care, finance, law and academia. IBM watsonx Assistant AI health care chatbots streamline tasks and help to reduce errors. The chatbots also assist clinicians and provide patient services 24/7.
Hospitals, government agencies and private health insurers use IBM’s health care technology. IBM delivered conservative 1% year-over-year revenue growth in Q3 2024, but its 10% year-over-year software revenue growth was the highlight of its latest quarterly report. Artificial intelligence solutions have propelled the company’s software revenue higher, driving its generative AI book of business to over $3 billion, up by more than $1 billion quarter to quarter.
IBM stock has enjoyed a resurgence after a lost decade. Even with the market-beating rally in 2024, IBM still offers a generous 3% yield.
Eli Lilly and Co. (LLY)
Lilly is a pharmaceutical firm that provides various drugs and health care services. Mounjaro, the company’s alternative to Novo Nordisk’s (NVO) Ozempic, has been a big revenue driver over the past few quarters. Zepbound, another weight-loss drug, has also contributed to the company’s revenue and profits.
Shares have soundly outperformed the stock market, up by more than 450% over the past five years. The stock also has a real shot of reaching a $1 trillion market cap within a few years. Revenue increased by 20% year over year in Q3 2024.
Eli Lilly recently partnered with OpenAI to discover novel medicines that can assist health care professionals. The firm stated that its partnership with OpenAI “underscores our commitment to addressing significant health challenges experienced by people around the world.”
Lilly also made a $409 million investment into Genetic Leap, a biotech company that uses AI models to discover RNA-targeted drugs.
Medtronic PLC (MDT)
Medtronic uses artificial intelligence to detect and help treat cancer, diabetes and other diseases. It offers leading health care solutions to challenging problems, such as robotic-assisted surgeries through Medtronic Hugo. These robots and Medtronic’s other AI investments can reduce human errors, streamline workflows and enable better outcomes for patients.
The company has made several acquisitions to boost its presence in the AI industry. The Companion Medical acquisition has helped Medtronic release new product lines that feature smart technology to deliver better patient care. Medtronic’s acquisition of Medicrea can make it a leading resource for spinal surgery. Medicrea’s technology can enable more effective spinal surgery through artificial intelligence and predictive modeling. The Digital Surgery acquisition is another notable deal that gave Medtronic more exposure to the smart medical devices and technologies market.
Medtronic delivered 5.3% year-over-year revenue growth in Q2 FY25, as reported on Nov. 19. The company also raised its fiscal 2025 organic revenue growth and EPS guidance.
Stryker Corp. (SYK)
Stryker produces medical devices and equipment that help more than 150 million patients each year. Shares have rallied by more than 20% year to date, and SYK comes with a nearly 1% dividend yield for investors.
The company uses AI to streamline its workflow to reduce human errors and boost productivity. Stryker’s care.ai acquisition in August 2024 bolstered its position in the AI industry. Care.ai offers smart room tech, ambient intelligence solutions and AI-assisted virtual care workflows.
The company’s robotics and software can help achieve personalized solutions for each patient. Its product mix helped the company deliver 11.9% year-over-year revenue growth in Q3 2024. Earnings per share increased by 20% year over year to reach $2.16 per share.
Boston Scientific Corp. (BSX)
Boston Scientific has been delivering innovative health care products and services for almost 50 years. The stock has produced tremendous returns for long-term investors, including a year-to-date return that exceeds 50%. The biopharmaceutical firm delivered 19.4% year-over-year revenue growth in Q3 2024, and almost a quarter of all sales came from the U.S.
The company has stated that it will use mergers and acquisitions to expand its market share and tap into artificial intelligence. The recent acquisition of Cortex added to the company’s electrophysiology portfolio. The deal’s amount was undisclosed. Boston Scientific also completed a $1.3 billion acquisition of Silk Road Medical and should close its $3.7 billion Axonics acquisition soon.
Abbott Laboratories (ABT)
Abbott Laboratories is a defensive health care stock that offers a 2.1% yield. The dividend received a boost due to the firm’s decision to raise the dividend for the 53rd consecutive year. Abbott’s quarterly dividend has increased by more than 60% since 2020, making it a pick to consider for dividend growth investors.
Abbott uses artificial intelligence to provide several health care solutions. Its technology provides micrometer-level medical imaging, which can capture image and risk data in the arteries of the eye or heart. Furthermore, its machine learning algorithm can predict heart attacks so patients can take preventive measures.
It’s also possible to diagnose other conditions through Abbott’s technology. The company has joined forces with iCardio.ai, for example, to enhance its medical imaging devices.
Excluding COVID-19 testing-related sales, Abbott maintained its full-year 2024 organic sales growth guidance range of 9.5% to 10% after announcing Q3 2024 results.
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AI in Health Care: 8 Stocks to Buy Now originally appeared on usnews.com
Update 12/23/24: This story was previously published at an earlier date and has been updated with new information.
