According to the Advanced Medical Technology Association, med tech is defined as “companies that develop, manufacture, and distribute the technologies, devices, equipment, diagnostic tests, and health information systems.” The organization reports that these firms favorably change health care with “earlier disease detection, less-invasive procedures, and more effective treatments.”

One rapidly emerging section of med tech is artificial intelligence, which is enabling the drug discovery process to move more quickly and have a meaningfully higher rate of success. Another key area is robotics surgery, which is making surgical procedures easier for doctors to carry out and more precise.

However, many types of new medical technologies are transforming medicine, significantly improving patients’ lives and prognosis, and enabling many companies to generate huge profits. Indeed, as another InvestorPlace columnist, Josh Enomoto, recently reported, the sector’s value, according to one estimate, will reach almost $776.5 billion in 2033, up from $503.2 billion currently.

Here are the three best med tech stocks to buy now.

Schrodinger (SDGR)

Schrodinger’s (NASDAQ:SDGR) technology uses physics and AI to speed up drug discovery and improve the likelihood of picking successful drug candidates.

Molecules identified by AI as having a high chance of becoming viable drugs have success rates of 80% to 90% in Phase 1 clinical studies, a peer-reviewed study by Boston Consulting Group found. Without AI, the success rate is just 70%.  

Moreover, with all of the top 20 pharmaceutical companies showing interest in utilizing AI, the number of molecules advanced by AI-focused biotechs into clinical studies “increased at a compound annual growth rate of more than 60% over the past 10 years.”

Schrodinger’s Q2 results indicate that the firm is benefiting significantly from drug companies’ rising interest in AI and the success of its platform. Revenue generated by the software that the firm licenses to pharmaceutical companies jumped 21% versus the same period a year earlier.

Given the firm’s strong growth and tremendous potential, I view SDGR stock as one of the best med tech stocks to buy now.

RxSight (RXST)

RXSight (NASDAQ:RXST) sells implantable lenses that counteract cataracts in older patients’ eyes. The company’s light-adjustable lenses change shape based on ultraviolet light within patients’ eyes, improving their vision. And LAL lenses can be adjusted, based on patients’ needs, after they’re implanted.

Moreover, RXSight’s recently released premium version of its LAL lens offers superior depth of focus versus its preceding offerings. Investment bank Stifel expects the premium version to generate significant growth for RXSight in 2024 and 2025.  

In Q1, RXSight’s top line surged 69% versus the same period a year earlier, while its loss per share fell to 25 cents from a loss per share of 42 cents in Q1 of 2023. Analysts, on average, now expect the company to become profitable in 2026.

Twist Bioscience (TWST)

Twist Bioscience (NASDAQ:TWST) develops synthetic DNA that enables companies to find and develop new drugs.

Investment bank Guggenheim started coverage of the shares on June 5 with a “buy” rating. The bank believes that the company’s synthetic DNA is superior to that of its competitors in cost, speed and quality, Seeking Alpha reported.

Additionally, according to Guggenheim, Twist has excelled at finding new sectors to market its products. Calling the stock’s risk/reward ratio “compelling,” the bank placed a $53 price target on the shares.

Analysts, on average, expect the company’s revenue to increase by 24% this year and by 20.6% in 2025.

The stock has a relative strength rating of 99, indicating that the shares have outperformed by a wide margin over the last year. Moreover, according to Investor’s Business Daily, the shares have an accumulation/distribution rating of A-, indicating that large institutional investors have been buying significant quantities of the stock over the past 13 weeks.

Given the firm’s strong products and marketing acumen, I view it as one of the best med tech stocks to buy now.

On the date of publication, Larry Ramer held a long position in SDGR. 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.