Markets tanked on Monday because the Japanese central bank raised its interest rate to 0.25%. Interest rates were originally at a benchmark between 0 and 0.1, meaning a minor 15- to 25-basis-point increase had significant consequences for investors who were making margin calls with Yen.
Investors raced to sell off their stock and repay their loans, causing markets to crash. A weaker market allows investors to purchase stock at discounted prices. Indeed, the Healthcare sector is positioned to grow to $819 billion by 2027 at a robust 7% CAGR. One of the strongest growing sectors within the industry is health tech from generative AI use cases in the space.
Investors should take advantage of current market conditions and buy these Healthcare AI stocks.
Twist Bioscience (TWST)
Twist BioScience (NASDAQ:TWST) is a biotechnology company that manufactures synthetic DNA products. Yahoo! Finance reports seven analysts predicting a 1-year price range on TWST between $31.11 and $65.00, with an average price target of $51.91.
TWST reported financials that are characteristic of a biotechnology company. Q2 2024 revenue was strong, growing 27.81% YOY. However, the company has yet to return a profit this quarter, which has continued for the past year. There has been a trend of decreasing assets for the company, with total assets decreasing by 21.25% for Q2 2024. This marks the biggest decrease in the past year. However, the company’s improving liquidity offers hope to investors. A 464.11% increase in free cash flow for Q2 2024 demonstrates management handling operational expenses.
The company may have a reversal in the future from a partnership with bitBiome. Both companies partnered to create an enzyme screening kit with pharmaceutical applications. The enzyme (transaminase) within the kit is specialized in synthesizing active pharmaceutical ingredients while serving as an environmentally safe alternative to other methods. TWST recently joined the U.S. AI Safety Institute Consortium (ASIC) to promote ethical AI development. Being environmentally and ethically conscious with upside potential makes TWST one of the healthcare AI stocks to buy.
GE Healthcare (GEHC)
GE Healthcare (NASDAQ:GEHC) is a healthcare company that provides digital infrastructure, data analytics and decision support tools for various healthcare applications. Yahoo! Finance reports 17 analysts predicting a 1-year price range on GEHC between $84.00 and $105.00, with an average price target of $93.95.
GEHC has solid financials for Q2 2024. The company barely missed on revenue but beat EPS expectations for the quarter. Revenue grew 0.46% year over year, and net profit margin grew 1.84% year over year. Additionally, management has improved its handling of operational expenditures, with free cash flow growing 131.81% year over year.
GEHC could be primed for a breakout with an AWS partnership. GEHC has partnered with Amazon (NASDAQ:AMZN) to develop AI models for healthcare applications. Specifically, the partnership aims to aggregate data from doctor notes, x-rays and other medical tests to develop healthcare insights. For instance, compositing data in such a manner streamlines future similar processes by establishing precedents of solutions and treatments. The potential this AWS partnership carries, alongside strong financials, makes GEHC one of the Healthcare AI stocks to watch.
Clover Health (CLOV)
Clover Health (NASDAQ:CLOV) is a healthcare company that provides Medicare Advantage insurance plans and operates as a direct contracting entity of the US government. Yahoo Finance! reports three analysts covering the stock with one buy rating and two hold ratings for July 2024.
CLOV reported very strong financials for Q2 2024. While revenue grew by 7%, the net profit margin grew by 75.33%. Moreover, this quarter marks the first quarter of positive net income for the company. As a result of such good earnings, management has improved full-year guidance. The level of improvement is best seen through EBITDA projections. Originally, EBITDA guidance was between a $20 million loss and gain; now, it is between $50 and $65 million.
The company has developed Clover Assistant, an AI assistant SaaS. The assistant is meant to serve as a clinical decision-making tool for payers and providers based on the patient’s medical and financial data. Furthermore, the assistant tool allows CLOV to expand in areas that Medicare Advantage doesn’t reach. It also has the potential for one-on-one use with Medicare Advantage patients as a recurring revenue stream on a use-by-use basis. Developments with AI and an improving financial outlook make CLOV one of the healthcare stocks for investors to consider.
On the date of publication, Matthew Rodrigues did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
