The medical sector is one of the major adopters of artificial intelligence (AI), which is currently being used to synthesize new compounds for drugs and create devices for more precise measurement and faster and more accurate diagnosis.
Starting from generative AI to surgical robotics, one common application of these has been in diagnostic settings, where they quickly and precisely detect image abnormalities that might be challenging for the human eye to spot. Further, electronic health records, electronic medical records, predictive analytics and real-time alerting have been gaining prominence.
Here, we recommend investors to keenly focus on five healthcare giants that have deployed extensive AI applications. These are Medtronic plc MDT, Eli Lilly and Co. LLY, Boston Scientific Corp. BSX, Novartis AG NVS and Abbott Laboratories ABT.
Healthcare AI Fourishing
AI has fundamentally reshaped the medical landscape in 2024, revolutionizing diagnostics, treatment and operational efficiency. AI-powered diagnostics have taken center stage, enhancing accuracy and speed. The Pragma Market Research report said that by 2025, the global AI in the healthcare market is projected to reach $95.65 billion.
Personalized medicine has also seen remarkable advancements, with AI analyzing genetic, lifestyle and clinical data to recommend tailored treatment plans. This shift not only helps improve patient outcomes but also optimizes resource utilization.
AI-driven operational efficiencies have alleviated administrative burdens on healthcare facilities. Automated scheduling, predictive maintenance of medical equipment, and resource allocation systems have streamlined workflows, cut costs and improved patient care.
5 AI-Powered Healthcare Giants in Focus
These stocks have strong revenues and earnings growth potentials for 2025. Moreover, these stocks have seen positive earnings estimate revisions over the last 30 days. Each of these stocks carries either a Zacks Rank #2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of the above-mentioned five healthcare stocks year to date.
Zacks Investment Research
Image Source: Zacks Investment Research
Medtronic plc
Zacks Rank #3 Medtronic is actively incorporating AI into its solutions to elevate patient care and optimize operations. In surgical systems, MDT’s collaboration with Vizient has introduced an AI-powered surgical video management and analytics platform designed to enhance visualization and data-driven decision-making for improved surgical outcomes.
MDT’s highly promising AI-based endoscopy module — the GI Genius project — is essentially a computer algorithm-aided detection system. These AI algorithms find patterns of colorectal polyps during a colonoscopy, which the physician may miss during the scan. Consequently, it increases the survivability likelihood of colorectal cancer patient by collecting polyps before they become malignant.
MDT’s partnership with CathWorks leverages AI to optimize cardiac procedures, improve diagnostic precision and boost patient outcomes. This will drive Medtronic’s growth by improving clinical results, streamlining workflows and solidifying its leadership in medtech innovation. The strategic integration of AI positions MDT to shape the future of healthcare through intelligent, data-driven solutions.
Medtronic has an expected revenue and earnings growth rate of 3.4% and 5%, respectively, for the current year (ending April 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days.
Eli Lilly and Co.
Zacks Rank #3 Eli Lilly boasts a wide range of products that serve a vast number of therapeutic areas. LLY focuses primarily on cardiometabolic health, neuroscience, oncology and immunology, which are all high growth areas and represent huge commercial potential.
Lilly has a strong portfolio of medicines to treat diabetes and other cardiometabolic diseases and its cardiometabolic business is its most successful business, particularly with the success of its tirzepatide medicines, Mounjaro and Zepbound.
Eli Lilly collaborated with OpenAI to discover novel medicines to assist doctors and other medical professionals. LLY stated that its partnership with OpenAI "underscores our commitment to addressing significant health challenges experienced by people around the world." LLY also invested $409 million into Genetic Leap, a biotech company that uses AI models to discover RNA-targeted drugs.
Eli Lilly has an expected revenue and earnings growth rate of 33% and 80.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings remained flat over the last 30 days.
Boston Scientific Corp.
Zacks Rank #2 Boston Scientific has invested billions in AI-driven health IT solutions to revolutionize healthcare delivery. A significant portion of BSX’s investments is allocated to health IT infrastructure automation to streamline operations and enhance clinical outcomes through advanced systems. It will optimize infrastructure, strengthening BSX’s technological foundation.
Investments are also made in AI-enhanced medical education tools, empowering healthcare professionals with cutting-edge knowledge, and in patient engagement solutions, fostering personalized care. These initiatives helped BSX to improve operational efficiency, reduce costs and elevate patient outcomes, driving growth and solidifying its industry leadership.
Boston Scientific has an expected revenue and earnings growth rate of 13.8% and 13.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.9% over the last 60 days.
Novartis AG
Zacks Rank #3 Novartis has been in the process to adopt AI applications over the last few years. NVS applies AI for three distinct applications: Generative Chemistry, AE Brain and AI Nurse. Use of AI enables NVS continuously develop innovative technologies for patient applications.
NVS’ Generative Chemistry segment uses machine learning to assists researchers to scan databases of potential molecular structures in order to create new pharmaceuticals. NVS’ AE brain segment quickly analyzes text documents containing warnings about a potential chemical compound. NVS’ AI Nurse platform supports patient engagement for individuals suffering from heart disease.
Novartis has an expected revenue and earnings growth rate of 4.1% and 8.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 30 days.
Abbott Laboratories
Zacks Rank #3 Abbott Laboratories uses AI to provide several health care solutions. ABT’s AI-powered technology provides micrometer-level medical imaging, which can capture image and risk data in the arteries of the eye or heart.
ABT’s machine learning algorithm has the ability to predict heart attacks enabling patients to take preventive measures. ABT is leveraging AI for advanced algorithm to transform medical imaging and diagnostics.
On a global scale, ABT currently holds a prominent position in point-of-care testing, with a portfolio focused on four key areas such as Infectious Disease, Cardiometabolic & Informatics, Toxicology and Consumer Diagnostics.
Abbott Laboratories has an expected revenue and earnings growth rate of 5.7% and 10.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days.
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