Investing in healthcare AI stocks

As artificial intelligence continues to grow, it comes as little surprise that this innovative tech finds numerous applications in the healthcare sector. Here’s what investors need to know before they buy in.

What is healthcare AI?

Healthcare AI is a subcategory of artificial intelligence: a term broadly applied to machines programmed to think like humans. And as artificial intelligence becomes increasingly prevalent in our day-to-day lives, its applications continue to grow.
Healthcare AI focuses on the use of artificial intelligence to research, treat and prevent diseases. With artificial intelligence, we can assess complex data sets, streamline medical services and make groundbreaking discoveries. In turn, these discoveries fuel the advancement of new technologies and tools in the healthcare sector.

How do I buy healthcare AI stocks?

1. Choose a stock trading platform. If you’re a beginner, our table below can help you choose.
2. Open your account. You’ll need to provide your ID, bank account information and Social Security number.
3. Fund your account. Before you can start trading, you’ll need to fund your account with a bank transfer.
4. Search for stocks. Use a stock screener to sort and filter stocks.
5. Submit your order. Once you’ve found a security you’d like to buy, indicate how many you’d like to purchase and submit your order.
6. Monitor your investments. Log in to your brokerage account to track the performance of your portfolio.

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Healthcare AI stocks

Stocks in the healthcare AI industry scale from big names in artificial intelligence, like Alphabet, to niche medical device manufacturers, like Globus Medical. See how the following stocks are performing, and view details like market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield.

• ABB (ABB.US)

  Company summary

  ABB Ltd engages in manufacture and sale of electrification, automation, robotics, and motion products for customers in utilities, industry and transport, and infrastructure in Switzerland and internationally. Its Electrification segment provides electric vehicle charging infrastructure, renewable power solutions, modular substation packages, distribution automation products, switchboard and panelboards, switchgear, UPS solutions, circuit breakers, measuring and sensing devices, control products, wiring accessories, enclosures and cabling systems, and intelligent home and building solutions. The company's Robotics & Discrete Automation segment offers industrial robots, software, robotic solutions and systems, field services, spare parts, and digital services. This segment also offers solutions based on its programmable logic controllers, industrial PCs, servo motion, transport system, and machine vision. Its Motion segment manufactures and sells drives, motors, generators, traction converters, and mechanical power transmission products that are driving the low-carbon future for industries, cities, infrastructure, and transportation. The company's Process Automation segment provides process and discrete control technologies, advanced process control software and manufacturing execution systems, sensing, measurement and analytical instrumentation, marine propulsion systems, and large turbochargers. In addition, this segment offers remote monitoring, preventive maintenance, asset performance management, emission monitoring, and cybersecurity services. It serves aluminum, automotive, buildings and infrastructure, cement, channel partners, chemical, data centers, food and beverage, process automation, life sciences, marine and ports, metals, mining, oil and gas, ports, power generation, printing, pulp and paper, railway, smart cities, water, and wind power industries. The company was founded in 1883 and is headquartered in Zurich, Switzerland.

  Historical performance

  Stock information

  • Market capitalization: $63983480832
  • P/E ratio: 16.6537
  • PEG ratio: 0.2763
  • Dividend yield: 0.0256%

  Get more detailed information and learn how to buy ABB.US stock

• Alphabet Inc Class A (GOOGL.US)

  Company summary

  Alphabet Inc. provides various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment offers products and services, including ads, Android, Chrome, hardware, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play store; and Fitbit wearable devices, Google Nest home products, Pixel phones, and other devices, as well as in the provision of YouTube non-advertising services. The Google Cloud segment offers infrastructure, platform, and other services; Google Workspace that include cloud-based collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells health technology and internet services. The company was founded in 1998 and is headquartered in Mountain View, California.

  Historical performance

  Stock information

  • Market capitalization: $1272991842304
  • P/E ratio: 19.082
  • PEG ratio: 1.3404
  • Dividend yield: 0%

  Get more detailed information and learn how to buy GOOGL.US stock

• Globus Medical (GMED.US)

  Company summary

  Globus Medical, Inc., a medical device company, develops and commercializes healthcare solutions for patients with musculoskeletal disorders in the United States and internationally. It offers spine products, such as traditional fusion implants comprising pedicle screw and rod systems, plating systems, intervertebral spacers, and corpectomy devices for treating degenerative, deformity, tumors, and trauma conditions; treatment options for motion preservation technologies that consist of dynamic stabilization, total disc replacement, and interspinous distraction devices; interventional pain management solutions to treat vertebral compression fractures; and regenerative biologic products comprising of allografts and synthetic alternatives. The company also offers products for the treatment of orthopedic trauma, including fracture plates, compression screws, intramedullary nails, and external fixation systems; and hip and knee joint solutions, including modular hip stems and acetabular cups, as well as posterior stabilizing and cruciate retaining knee arthroplasty implants. In addition, it distributes human cell, tissue, and cellular and tissue-based products. Globus Medical, Inc. was incorporated in 2003 and is headquartered in Audubon, Pennsylvania.

  Historical performance

  Stock information

  • Market capitalization: $7404327424
  • P/E ratio: 47.8452
  • PEG ratio: 2.928
  • Dividend yield: 0%

  Get more detailed information and learn how to buy GMED.US stock

• Health Catalyst (HCAT.US)

  Company summary

  Health Catalyst, Inc. provides data and analytics technology and services to healthcare organizations. Its offerings include data and analytics platform, a commercial-grade data and analytics platform for the healthcare sector; AI and data science, providing integration of AI into existing business intelligence tools, increasing analytics accuracy; population health management identifies improvement across the care continuum as well as actionable guidance for success and automated workflows; financial transformation providing costing and labor productivity insights and revenue capture; quality and safety improvement using clinical quality and patient safety data, analytics, and expert services; and national data ecosystem for thought leadership and mutual knowledge exchange to transform care delivery through next-gen insights. The company was formerly known as HQC Holdings, Inc. and changed its name to Health Catalyst, Inc. in March 2017. Health Catalyst, Inc. was founded in 2008 and is based in South Jordan, Utah.

  Historical performance

  Stock information

  • Market capitalization: $719975616
  • Dividend yield: 0%

  Get more detailed information and learn how to buy HCAT.US stock

• Intuitive Surgical (ISRG.US)

  Company summary

  Intuitive Surgical, Inc. develops, manufactures, and markets products that enable physicians and healthcare providers to enhance the quality of and access to minimally invasive care in the United States and internationally. The company offers the da Vinci Surgical System to enable complex surgery using a minimally invasive approach; and Ion endoluminal system, which extends its commercial offerings beyond surgery into diagnostic procedures enabling minimally invasive biopsies in the lung. It also provides a suite of stapling, energy, and core instrumentation for its surgical systems; progressive learning pathways to support the use of its technology; a complement of services to its customers, including support, installation, repair, and maintenance; and integrated digital capabilities providing unified and connected offerings, streamlining performance for hospitals with program-enhancing insights. The company was incorporated in 1995 and is headquartered in Sunnyvale, California.

  Historical performance

  Stock information

  • Market capitalization: $91166261248
  • P/E ratio: 68.6117
  • PEG ratio: 3.2734
  • Dividend yield: 0%

  Get more detailed information and learn how to buy ISRG.US stock

• Nuance Communications (NUAN.US)

  Company summary

  Nuance Communications, Inc. provides conversational and cognitive artificial intelligence (AI) innovations that bring intelligence to everyday work and life. The company delivers solutions that understand, analyze, and respond to people - amplifying human intelligence to increase productivity and security. Its Healthcare segment provides clinical speech and clinical language understanding solutions that improve the clinical documentation process, from capturing the complete patient record to improving clinical documentation and quality measures for reimbursement. Its solutions include Dragon Medical One, cloud-based speech solution; computer-assisted physician documentation; diagnostic imaging solutions; Nuance Dragon Ambient eXperience, a voice-enabled solution; and clinical documentation improvement and coding. The company's Enterprise segment primarily engages in using speech, natural language understanding, and artificial intelligence to provide automated customer solutions and services for voice, mobile, web, and messaging channels. Its solutions include intelligent engagement solutions; Conversational AI; Engagement AI; and Security AI. Its Other segment provides voicemail transcription services. It serves organizations across healthcare, financial services, telecommunications, government, and retail. The company markets and sells its solutions and technologies directly through sales force, as well as through a network of resellers, including system integrators, independent software vendors, value-added resellers, distributors, hardware vendors, telecommunications carriers, and e-commerce Websites worldwide. The company was formerly known as ScanSoft, Inc. and changed its name to Nuance Communications, Inc. in October 2005. Nuance Communications, Inc. was incorporated in 1992 and is headquartered in Burlington, Massachusetts. As of March 4, 2022, Nuance Communications, Inc. operates as a subsidiary of Microsoft Corporation.

  Historical performance

  Stock information

  • Market capitalization: $17882421248
  • PEG ratio: 13.72
  • Dividend yield: 0%

  Get more detailed information and learn how to buy NUAN.US stock

• Teladoc (TDOC.US)

  Company summary

  Teladoc Health, Inc. provides virtual healthcare services in the United States and internationally. The company offers a portfolio of services and solutions covering non-urgent, episodic, chronic, and complicated medical conditions, including diabetes, hypertension, chronic kidney disease, cancer, congestive heart failure, and mental health conditions. It offers a range of programs and services, including primary and specialty care telehealth solutions, chronic condition management, expert medical services, mental health solutions, and platform and program services. The company serves employers, health plans, hospitals and health systems, and insurance and financial services companies, as well as individual members. It offers its products and services under the Teladoc, Livongo, and BetterHelp brands. The company was formerly known as Teladoc, Inc. and changed its name to Teladoc Health, Inc. in August 2018. The company was incorporated in 2002 and is headquartered in Purchase, New York.

  Historical performance

  Stock information

  • Market capitalization: $4239249152
  • PEG ratio: -1.01
  • Dividend yield: 0%

  Get more detailed information and learn how to buy TDOC.US stock

• Thermo Fisher Scientific (TMO.US)

  Company summary

  Thermo Fisher Scientific Inc. offers life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and service worldwide. The company's Life Sciences Solutions segment offers reagents, instruments, and consumables for biological and medical research, discovery, and production of drugs and vaccines, as well as diagnosis of infections and diseases to pharmaceutical, biotechnology, agricultural, clinical, healthcare, academic, and government markets. Its Analytical Instruments segment provides instruments, consumables, software, and services for use in laboratory, on production line, and in field for pharmaceutical, biotechnology, academic, government, environmental, and other research and industrial markets, as well as clinical laboratories. The company's Specialty Diagnostics segment offers liquid, ready-to-use, and lyophilized immunodiagnostic reagent kits, as well as calibrators, controls, and calibration verification fluids; ImmunoCAP for allergy and asthma tests, and EliA for autoimmunity tests; dehydrated and prepared culture media, collection and transport systems, instrumentation, and consumables; human leukocyte antigen typing and testing for organ transplant market; and healthcare products. Its Laboratory Products and Services segment provides laboratory refrigerators and freezers, ultralow-temperature freezers, and cryopreservation storage tanks; temperature control, sample preparation and preservation, centrifugation, and biological safety cabinet products; water analysis instruments; laboratory plastics products; laboratory chemicals; and pharma services. The company offers products and services through a direct sales force, customer-service professionals, electronic commerce, third-party distributors, and catalogs. It has a strategic alliance with the University of California, San Francisco. The company was incorporated in 1956 and is based in Waltham, Massachusetts.

  Historical performance

  Stock information

  • Market capitalization: $227755800000
  • P/E ratio: 26.4965
  • PEG ratio: 4.2837
  • Dividend yield: 0.002%

  Get more detailed information and learn how to buy TMO.US stock

• Qiagen (QGEN.US)

  Company summary

  QIAGEN N.V. offers sample to insight solutions that transform biological materials into molecular insights worldwide. The company provides primary sample technology consumables, such as nucleic stabilization and purification kits for primary sample materials, manual and automated processing for genotyping, gene expression, and viral and bacterial analysis, as well as silica membranes and magnetic bead technologies; secondary sample technology consumables, including kits and components for purification of nucleic acids from secondary sample materials; and instruments for nucleic acid purification and accessories. It also provides interferon-gamma release assay for TB testing, and assays for post-transplant testing and viral load monitoring; assays for prenatal testing and detection of sexually transmitted diseases and HPV, as well as assays for analysis of genomic variants, such as mutations, insertions, deletions, and fusions; and sample to insight instruments, including one-step molecular analysis of hard-to-diagnose syndromes, and integrated PCR testing. In addition, it offers PCR consumables, such as quantitative PCR, reverse transcription, and combinations kits for analysis of gene expression, genotyping, and gene regulation instruments and technologies; human ID and forensics assay consumables, including STR assays for human ID, and assays for food contamination; PCR instruments consist of digital PCR solutions; and developed and configured OEM consumables. Further, the company provides predefined and custom NGS gene panels, library prep kits and components, and whole genome amplification; QIAGEN consumables and instruments, as well as bioinformatics solutions; and custom laboratory and genomic services. It serves molecular diagnostics, academia, pharmaceutical, and applied testing customers. It has a strategic alliance agreement with Sysmex Corporation and OncXerna Therapeutics, as well as an agreement with Mirati. The company was founded in 1986 and is headquartered in Venlo, the Netherlands.

  Historical performance

  Stock information

  • Market capitalization: $11464694784
  • P/E ratio: 24.9257
  • PEG ratio: 8.4627
  • Dividend yield: 0%

  Get more detailed information and learn how to buy QGEN.US stock

What ETFs track the healthcare AI category?

There are numerous artificial intelligence ETFs, including the Invesco QQQ, iShares US Technology ETF and First Trust Dow Jones Internet Index. But if you’re looking for something specific to healthcare AI, take a look at the Robo Global Healthcare Technology & Innovation (HTEC).
The Robo Global Healthcare Technology & Innovation ETF was launched in 2019 by advisory and research firm Robo Global. It tracks over 80 US stocks in healthcare and artificial intelligence from the US and around the world.

Why invest in healthcare AI stocks?

To put it bluntly, there is high growth potential. The global AI healthcare market, worth $4.9 billion in 2020, is expected to grow to $45.2 billion by 2026 at a compound annual growth rate (CAGR) of 44.9%, according to Markets and Markets.
Growth potential aside, artificial intelligence in the healthcare industry has the potential to produce lifesaving technology. AI developments in this sector can change how we identify and treat disease. And to see this in action, we need to look no further than Google’s AI research firm, DeepMind.

How DeepMind’s discovery will change healthcare

DeepMind announced in later November 2020 that its AlphaFold system had finally solved a protein folding challenge — one that had baffled and eluded the scientific community for decades. The successful passing of this protein folding test meant that AlphaFold could decipher the structure of proteins from an amino acid sequence in just a few days, a resource-intensive task that used to take years.
DeepMind’s breakthrough showcases how powerful and prevalent AI technology has and will continue to be in the healthcare industry. And this emerging trend presents an invaluable opportunity for investors seeking growth stocks.

Risks of investing in healthcare AI

One of the most critical risks facing healthcare AI stocks is competition. Companies in sectors like this — sectors on the cusp of significant growth — may be vulnerable to the self-imposed volatility of a highly competitive playing field.
Investors interested in these stocks have a challenging choice to make: invest in riskier small-cap stocks that may not survive the competition, or shell out hundreds for a single share of an already-established tech giant, like Google’s parent company, Alphabet.
Another consideration is governmental regulation. Tech companies are far from immune to regulatory disputes, and as the way we interact with this type of technology continues to evolve, some companies may be forced to reconsider their approach — a potentially time and capital-intensive process.

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Bottom line

Healthcare AI stocks have plenty of room to grow — and analysts are optimistic about this subsector’s potential. But governmental regulation coupled with a high degree of competition may threaten your investment in this category.
To invest in healthcare AI stocks, explore your brokerage account options with multiple platforms for the account best suited to your investment goals.

Frequently asked questions

• Do healthcare AI stocks pay dividends?

  Yes. Some that do include ABB and Thermo Fisher Scientific.