Hello, Reader.
In 1847, a group of luckless pioneers, called the Donner Party, headed west to California.
Infamously, the pack was forced to resort to cannibalism when they got stuck in the Sierra Nevada mountains during the winter.
A few years after that harrowing experience, a surviving member of the party wrote a letter in which she said…
My Dear Cousin,
We are all very well pleased with California. It is a beautiful country. It ought to be a beautiful country, to pay us for our trouble getting here.
In other words, almost no sacrifice seemed too extreme if living in California was the ultimate payoff.
You see, ever since the early days of the 1849 gold rush, California has spearheaded the American Dream. One hundred and seventy-five years of gilded economic growth have followed.
Out in the West, if you could imagine it, you could create it. And potentially reap a fortune.
But somewhere along the way, the California Dream lost its mojo… or at least part of it.
Many West Coast entrepreneurs and businesses are packing their bags and heading east. Last year, nearly 1% of the California population fled the Golden State to relocate elsewhere. Indeed, the Golden State’s population is now smaller than it was in 2010.
A new generation of dreamers and entrepreneurs are pursuing their dreams in the middle of the country.
Now, as investors, capitalizing on this trend is not particularly easy… or obvious. However, I’ve identified one sector that sits at the nexus of AI and the Rust Belt Renaissance, which I’d like to share with you in today’s Smart Money.
The companies operating in this sector do not merely lead the regional economies of the Midwest, but also the entire world.
Let’s take a look…
Midwest Dreamin’
The sector I’m talking about AI Healthcare – including medical device companies, digital health companies, biotech companies, and large pharmaceutical companies.
Check out this roster of healthcare companies headquartered in the thriving “Healthcare Belt” that extends from Tennessee to the Upper Midwest…
- GE HealthCare Technologies Inc. (GEHC), AbbVie Inc. (ABBV), and Abbott Laboratories (ABT) all operate out of Chicago.
- Zimmer Biomet Holdings Inc. (ZBH) is in Warsaw, Indiana.
- Stryker Corp. (SKY) is in Kalamazoo, Michigan.
- Baxter International Inc. (BAX) is in Deerfield, Illinois.
- Medtronic Plc’s (MDT) U.S. headquarters is in Minneapolis.
- P&G Pharmaceuticals is in Fisher, Indiana
- Exact Sciences Corp. (EXAS) is in Madison, Wisconsin.
- Eli Lilly and Co. (LLY) is in Indianapolis.
Partly, these companies are operating from the Midwest by chance. But they continue to operate there because of the growing number of tech companies in the Healthcare Belt, and because of the world-renowned research hospitals in the region. A recent report on the world’s best 250 hospitals named Minnesota’s Mayo Clinic No. 1 and Ohio’s Cleveland Clinic No. 2.
Opportunity abounds in this sector. In fact, I think it is offering one of the very best ways to profit from the AI boom. Let’s take a look at a specific example…
All About AI Healthcare
Last month, Oracle Corp. (ORCL) – an information technology company founded in California – joined the rush to the Healthcare Belt by announcing it would be relocating its headquarters to Nashville.
Explaining the move, Oracle founder Larry Ellison stated bluntly, “It’s the center of the industry we’re most concerned about, which is the healthcare industry.”
Two years ago, for example, Oracle spent $28 billion to purchase Cerner Corp. (CERN),an electronic-medical-records company.
Days after Oracle closed its acquisition, Ellison outlined a compelling plan to build a new generation of modern, secure healthcare information systems. He detailed four specific benefits he expects the merger with Cerner to deliver…
- Better information for public healthcare policymaking.
- Easier interfaces for doctors and nurses.
- Improved data-based communication channels for patients and doctors to talk and share data.
- Enhanced AI models for researchers and drug developers.
That last benefit is particularly fascinating because it stems directly from the unique power of AI.
As Oracle explains…
The new Oracle systems will be open so that technology partners and medical researchers will be able to develop AI-based modules and integrate them into the electronic health record system. Those modules will allow organizations with a great deal of domain expertise to share that expertise across the country and throughout the world. For example, Oracle partner Ronin worked with MD Anderson Cancer Center, one of the world’s top centers devoted to cancer patient care and research, to develop an AI module that monitors patients as they work through their treatment plans to reduce hospitalization.
The Cerner operations inside Oracle contribute less than 15% of total company revenues, but that percentage should grow rapidly as Ellison pursues his ambitions in, once again, the “industry we’re most concerned about, which is the healthcare industry.”
Although I am not recommending an investment in Oracle today, I do recommend keeping a close eye on the fusion of AI technology and healthcare, especially as it expands rapidly across the Healthcare Belt of the Midwest.
There is an AI healthcare investment that I do recommend, though, and it all starts with Neuralink, Elon Musk’s neurotechnology company.
Musk and his team Neuralink have created a new AI device that aims to restore mobility in paralyzed people, sight to the blind, and hearing to the deaf.
Now, Neuralink is currently a private company. However, this one well-known tech company can give you some exposure to Neuralink’s growth.
Click here to learn to all of the details.
Regards,
Eric Fry
