8 Tech Stocks to Buy for the Future of Healthcare — Besides Amazon

tech stocks - 8 Tech Stocks to Buy for the Future of Healthcare — Besides Amazon

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Amazon (NASDAQ:AMZN) has made repeated headlines about its impending expansion into the healthcare. From teaming up with JPMorgan (NYSE:JPM) and Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) to form a still-vague healthcare alliance, to buying Pill Pack, Wall Street is ready for the e-commerce giant to “disrupt” the healthcare sector next. But the truth of the matter is, Amazon is not alone. Many of the biggest tech stocks have been quietly exploring the healthcare sector.

So why are giant tech companies pivoting toward healthcare?

There are a few reasons. One, of course, is the baby boomers. As the once-largest generation in U.S. history (millennials have surpassed them) ages, healthcare costs are exploding. The U.S. Centers for Medicare and Medicaid Services estimates that healthcare spending will increase an average of 5.5% over the next ten years and represent 19.7% of the economy — or about $5.7 trillion. Is it any surprise that a sector that prides itself on disrupting others would want a piece of that pie?

The second reason stems from the first. Many investors are aware that we’re in a technological renaissance right now. New technologies are being invented at a staggering rate and our abilities with existing ones are improving just as quickly. But did you know the rate of scientific discovery has kept pace as well? New companies are popping up all the time, and they need funding, partners and even acquirers. These are two sectors where innovative, exciting and yes, profitable advancements are being made every day. Why wouldn’t major tech stocks look for inroads here? After all, to disrupt a stagnant market, you have to push out old stalwarts; but jump into an expanding one, and you’re along for the ride.

The third reason for tech companies to enter the U.S. healthcare market is, well, that the U.S. healthcare market is broken. It’s inefficient, not equal-access, overpriced and in a shocking recent discovery, complicated. Enter tech companies. Today’s largest tech companies have the capital and the motivation (read: more capital) to find solutions to some of the nations’ biggest healthcare problems, and a number are doing just that.

Last week, CNBC pointed out that many of the largest tech companies have hired cardiologists recently. Not just Amazon, but Apple (NASDAQ:AAPL) and Alphabet’s (NASDAQ:GOOGL, NASDAQ:GOOOG) Verily have expanded into just this specific area of healthcare. CNBC pointed out that this is likely because the wealth of research into heart disease and what prevents it gives these companies an easy path to profit. There’s already evidence that consumer products can help.

But what about the tech companies that are innovating in healthcare? There are plenty of those as well. Here are eight tech stocks, besides Amazon, that are pivoting to healthcare.

Source: AliveCor

Apple (AAPL)

Unlike Amazon and Google, which started as niche companies and have expanded into one industry after the other, Apple has built the largest publically traded company in the world through one key thing: intuitive, consumer-friendly devices integrated into the Apple ecosystem. When it comes to healthcare, Apple is sticking to its strength.

If you’ve heard of Apple in healthcare, you’ve likely heard about it in the context of the Apple Watch. The company’s most recent release — the Apple Watch Series 4 — brings an improved heart rate monitor and fall detection, but Apple is also partnering with other companies to make its smartwatch even smarter.

For example, Dexcom (NASDAQ:DXCM) now works with Apple to bring continuous glucose monitoring to the Apple watch. This allows diabetes patients to always be aware of their glucose levels so they can react to any fluctuations before they become dangerous. The information can also be viewed on an iPhone — or a loved one’s iPhone, which is useful for caretakers. Apple Watches can also be paired with the FDA-cleared KardiaBand for a clinical-grade EKG for heart patients.

But if this was all Apple was doing to get into healthcare, this spot on the list could be occupied by Fitbit (NYSE:FIT). Instead, Apple is doing something worthy of its size and resources: slowly invading hospitals and making its integrated product ecosystem indispensable to them. With Apple’s healthcare products and platform, doctors, nurses and patients can use Apple products to store medical records (that are shared instantly with healthcare and support teams), explain conditions, view imaging, monitor patients at home and even prescribe medication. A growing list of hospitals already use this system.

Apple is even getting into medical research, but it’s doing it in true Apple fashion — by providing the easy-to-use platform. With ResearchKit, Apple helps streamline the process of clinical trials and allows researchers to build apps for their specific needs. This allows clinical trials to be open to more people, streamlining the research itself and making the data obtained more useful. Apps built using ResearchKit have been used to study Parkinson’s disease and diagnose autism in young children.

Meanwhile, CareKit, a complementary platform lets healthcare providers develop apps to help patients manage their medical conditions.

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Microsoft (MSFT)

Fellow mega-cap tech stock Microsoft (NASDAQ:MSFT) is taking a similar approach to Apple when it comes to healthcare. It’s adapting existing technologies like Office 365, Windows and Azure to provide healthcare solutions. Microsoft’s tech — which is shifting toward subscription revenue — is being used to coordinate healthcare across vast networks, improving patient experiences and outcomes. It can also securely store patient data and ensure compliance with different standards, such as HIPAA.

How useful is this? The U.K.’s NHS entered into a deal with Microsoft earlier this year to protect its data and is using Office 365 to improve its information exchange and collaboration capabilities across the country-wide network. Having an entire country’s healthcare network as a customer is not something to ignore.

Unlike Apple, however, Microsoft is not stopping with existing technologies. It has launched an entire healthcare division to explore the uses of artificial intelligence in healthcare. Between 2013 and 2017 Microsoft filed 73 healthcare patents. Healthcare NExT aims to accelerate healthcare innovation by harnessing MSFT’s AI and cloud computing abilities.

Microsoft Healthcare is also partnering with biotech companies in everything from mixed-reality three-dimensional imaging and surgery assistance to using AI and machine learning to map the human immune system and develop a universal bloodtest for the early detection of almost any disease.

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Alphabet (GOOG)

Formerly known as Google Life Sciences, Alphabet’s Verily Life Sciences “lives at the intersection of technology, data science and healthcare.” Basically, Alphabet is taking what it already excels at — data collection, organization and analysis and cutting-edge technology — and aiming it at healthcare.

Verily develops tools to collect and organize health data. Released earlier this year, the new Cloud Healthcare Application Programming Interface (API) simplifies medical data for healthcare providers. It allows different healthcare data types and programs to be used together and uploaded to the cloud. This makes it easy to access and transfer a patient’s medical history.

But the technology doesn’t stop there. Once a patient’s data in the cloud, it can be used for analytics and research. And as machine learning capabilities increase, all of this data can be used to see trends across many patients and improve treatments and diagnosis capabilities.

Verily’s deep learning capabilities have already been shown to predict inpatient mortality, unexpected re-admissions and a length of stay better than traditional models. Keep in mind that was just one study, but the study used massive amounts of data.

Although important, all of that isn’t particularly flashy or interesting. But don’t worry, Alphabet is not falling behind in the cool new tech area when it comes to healthcare either. Verily has a range of ambitious technologies and projects in different stages of development.

For example, Verily has teamed up with Novartis (NYSE:NVS) subsidiary and eye-care giant Alcon to develop smart contact lenses. These lenses contain integrated circuits, sensors and wireless communication capabilities. Right now, the still-in-development lenses are glucose sensors that provide vision correction, but there are many more applications if Verily can pull this off this extremely complex technology.

Verily has also developed Liftware, utensils with stabilizing technology that help people with hand tremors and other arm and hand mobility issues feed themselves and be independent.

And then there’s Galvani Bioelectronics, a joint partnership between Verily and GlaxoSmithKline (NYSE:GSK). This venture is focused on the development of bioelectronic medicines — medicines consisting of miniaturized, implantable devices. The company was formed in 2016, and developing a new field of medicine isn’t fast, so there’s not much news yet, but it’s definitely something to keep an eye on.

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Intel (INTC)

Moving a bit lower on the market-cap scale (and I mean a bit), Intel (NASDAQ:INTC) is another tech stock making inroads into healthcare. Predictive clinical analytics combine data analytics, machine learning and artificial intelligence to identify at-risk patients and populations and improve the allocation of our health resources. For an individual patient, this might mean having a rapid response team ready for someone with specialized needs. On a population level, this would mean improving practices for certain groups of people at risk for specific health complications.

Intel has also figured out how to bring machine learning into medical diagnoses. By inputting vast amounts of patient data into Saffron’s Natural Intelligence Platform, data scientists and leading cardiologists were able to distinguish between two previously difficult to separate diagnoses — cardiomyopathy and constrictive pericarditis.

This is huge. If constrictive pericarditis is misdiagnosed and treated like cardiomyopathy, it can be fatal. Today’s machine learning is capable of analyzing up to 10,000 different attributes per each beat of a patient’s heart and comparing it to the attributes of patients with either cardiomyopathy or constrictive pericarditis.

Intel chips and processors themselves could also play a huge role in healthcare advancement. Intel has teamed up with Surgical Theater to power their Precision VR, a medical visualization platform that can combine existing imaging technology to build 3D models of a patients’ brain. Not only does this help educate patients about their specific conditions before brain surgery, it can also help neurosurgeons make patient-specific plans for brain surgery to perform the safest procedure possible.

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Nvidia (NVDA)

Nvidia (NASDAQ:NVDA) has been hit lately over the concern that the chip market has entered bear market territory. But Nvidia’s healthcare forays underline the growth narrative for the tech stock. The chip market isn’t oversaturated because its customer base growing at a faster rate than ever before.

One area that now needs the GPU chips that Nvidia produces is healthcare. As other tech stocks like GOOGL, AAPL and AMZN develop these amazing new technologies that require computing power never seen before, someone has to provide the computing power. Nvidia is one of these companies. Their GPU-accelerated applications and systems are allowing healthcare providers and researchers to analyze huge amounts of data, to do things like genetic analysis and improving diagnoses.

One area where Nvidia surpasses other chipmakers is in graphics, and that leads to Nvidia Clara, a medical imaging platform that brings AI to next-generation medical imaging. This improves diagnosis, detection, and treatment of almost all diseases and ailments.

Just this week, Nvidia announced a partnership with Scripps Research Translational Institute to develop AI and deep learning applications for genomic and digital health sensor data.

“AI in medicine has tremendous promise,” said Eric Topol, Scripps Research Translational Intitute’s founder and director. “Eventually, it will markedly improve accuracy, efficiency, and workflow in medical practice with the potential to lower cost. But so much of this depends on validating AI algorithms and proving clinical efficacy. The data inputs from sensors and sequencing, in particular, will play an important role.”

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Qualcomm (QCOM)

You’ve likely heard of the Internet of Things (IoT), the new interconnectedness of every device from your smart speaker to your refrigerator to your doorbell. But what about the Internet of Medical Things (IoMT)? Wouldn’t it make sense for medical devices to be connected to each other to enhance patient care? Qualcomm (NASDAQ:QCOM) agrees, and that’s why it’s leading the way — connecting everyone who wants to accompany it.

Qualcomm believes that along with the technological advancements that will come with the IoMT, will come new technical challenges. As such, QCOM has developed the 2net Platform, “a scalable, secure, cloud-based infrastructure enabling end-to-end connectivity.”

The 2net Platform creates a network with what QCOM calls “medical-grade connectivity.” This includes healthcare devices within a hospital or healthcare setting and even the patients’ homes themselves. Wearables, medical devices, and sensors can transmit information back to a physician through QCOM’s secure ecosystem.

Qualcomm designs the products that create this network itself, but also offers design kits to those looking to make products that connect to the IoMT.

Uber Lyft
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Uber and Lyft

To be clear, the two ride-sharing apps did not go public while you weren’t looking. Although it looks like Lyft may beat Uber there. But Uber and Lyft are both expanding into healthcare. At the end of 2017, areas with Lyft and Uber had seen a decrease of 7% in ambulance usage. Patients who need to go to the hospital, but know they aren’t in a life-threatening condition are opting to use Lyft and Uber, thus freeing up ambulances to get to emergencies faster. And when people need ambulances, a few minutes can be the difference between life and death.

But those are just the side effects of Lyft and Uber’s existence. What are the companies actually doing to enter the healthcare space? Basically, they’re expanding access to healthcare. Almost 3.6 million people miss doctors’ appointments due to lack of transportation each year, and this is a much bigger problem in areas with low access to public transportation and low car ownership.

Uber Health allows healthcare professionals or their offices to book a ride to a patient’s appointment up to 30 days ahead of time. The patient receives texts to confirm the trip details, but no other action is needed on their part. The patients don’t need to be Uber users or even have a phone — opening up the service to more elderly patients.

In 2017, Lyft partnered with Blue Cross Blue Shield to get patients to appointments. They then expanded the service to get patients in transportation deserts to the nearest CVS (NYSE:CVS) and Walgreens (NASDAQ:WBA) pharmacies to pick up medication. But this isn’t just for people with private health insurance: Lyft has teamed up with a number of organizations to expand access to their service to those with Medicaid and Medicare.

Also, in usual Lyft fashion, they more quietly offer a similar service to Uber where individual healthcare providers can sign up to schedule patient rides.

As of this writing, Regina Borsellino held no positions in the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2018/10/7-tech-stocks-to-buy-for-the-future-of-healthcare-besides-amazon/.

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