Artificial intelligence (AI) is hotter than ever, thanks to the intense interest sparked by OpenAI’s ChatGPT. Interestingly, though, according to Stanford University’s latest AI Index report, total private investment in AI is expected to drop by nearly 27% in 2022.
However, last year’s overall private AI investment of $91.9 billion is still the second highest amount devoted to it in history. And one sector stands out above the rest at $6.1 billion in investment — health care.
The healthcare sector will provide a huge opportunity for investors in the coming years. Here are three top stocks to buy now to profit from the AI boom
Don’t underestimate the alphabet (GOOG -0.85%) (GOOGL -0.67%) In the AI race. The company is poised to be a huge winner with generative AI. But there are several reasons why it could particularly benefit from the growing adoption of AI in healthcare.
The company’s Google Cloud unit ranks as one of the fastest growing cloud service providers. Many leading healthcare organizations and companies are already using Google Cloud, including the American Cancer Society. Cardinal health, McKessonAnd modern. Expect Google Cloud’s AI tools to attract more healthcare customers in the future
Alphabet could have a real game-changer on its hands, along with other AI systems focused on healthcare. Its DeepMind subsidiary developed AlphaFold, which can accurately predict the shape into which proteins will fold based on strings of amino acids—a highly complex task. These advances could play a key role in developing new drugs and understanding biological processes.
Also, some of Alphabet’s famous “other bets” companies are using AI to advance healthcare. Really incorporating research into AI to develop tools to improve healthcare outcomes. Calico uses AI in its quest to extend human life. Venture capital unit Capitalogy invests in businesses that use AI in healthcare, notably Applied Systems, Oscar Health and Practo.
2. Intuitive surgery
Intuitive surgical (ISRG -0.38%) Alphabet doesn’t have a long list of AI certifications. However, the robotic surgical system maker believes that AI offers tremendous opportunities to improve minimally invasive surgery.
One area Intuitive is exploring is using AI to train medical students and residents more quickly. That’s a big deal considering the growing physician shortage in this country. The company also believes that AI can potentially help select the best patient candidates for surgery as well as predict which surgical procedure has the highest chance of success for each patient. Over time, Intuitive even anticipates that AI could provide real-time input to surgeons as they operate.
No company is better positioned to make all of this a reality than Intuitive Surgical. Intuitive has more than 7,500 Da Vinci robotic surgical systems deployed worldwide. More than 11 million surgical procedures have been performed with the systems so far, giving the company a wealth of data to use in training AI systems.
It’s telling when the world’s best-performing hedge funds load up on a stock. That’s exactly what Ken Griffin’s Citadel Advisors did with Intuitive Surgery in the fourth quarter of 2022. Griffin and his team undoubtedly see the long-term potential that intuitive offers.
3. AbCellera Biologics
Alphabet and Intuitive Surgical are well-established, highly profitable companies that aim to harness the power of AI to improve healthcare. But if you’re looking for a more speculative pick that has the potential to be a multibagger, check out AbCellera Biologics (ABCl 0.14%).
What is the connection between these biotech companies and AI? AbCellera uses AI to speed up the discovery of antibodies that can be used to develop new drugs. The company aims to advance antibody therapies to the clinic two times faster than its competitors.
AbCellera already has plenty of partners. Eli Lilly The biotech used antibodies to bring the Covid-19 therapies bamlanivimab and bebtelovimab to market. Other associates included AbbVie, Denali Therapeutics, Gilead Sciencesand modern.
The biotech has eight clinical programs in its pipeline. AbCellera has 131 discovery programs under contract of which 69 have already commenced. It has 17 other co-development programs under the agreement, six of which have already started. The company could grow even larger if a small fraction of its antibodies prove safe and effective.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keith Speights has positions in AbbVie, Alphabet, and Intuitive Surgical. The Motley Fool has positions in and recommends AbCellera Biologics, Alphabet, Gilead Sciences, and Intuitive Surgical. The Motley Fool recommends McKesson and Moderna Motley Fool has a revealing policy.