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Tom Yeung here with today’s Smart Money.
There’s a saying that parents often don’t notice how quickly their children grow.
The process is slow and chaotic. Sometimes, it can even feel like you’re taking a step backward after a tough day.
Meanwhile, it’s the aunt who shows up once a year for Thanksgiving who says, “My word… look at how you’ve grown!”
The development of artificial intelligence has been the same way, with arguably equal amounts of unruliness. Over the weekend, for instance, OpenAI admitted to another set of unintentional cyberattacks – this time directed at several U.S. government websites. Every step forward seems to come with a step in reverse.
But if you look at AI from an outside perspective, it’s astonishing how quickly things have progressed.
In today’s Smart Money, let’s consider some of the recent incredible leaps that AI has made, particularly in healthcare. The past few months of AI development have revolutionized that industry… and barely anyone has noticed.
100 Days of AI Breakthroughs
Let’s start by taking a look at how quickly the industry has moved in the past 100 days alone:
1. Rentosertib, the first-ever drug discovered and designed by generative AI, entered final Phase III testing. In earlier trials, this drug from InSilico Medicine Cayman TopCo (ISLMF) became the first drug to reverse lungdamage in idiopathic pulmonary fibrosis patients, rather than merely slowing the loss.
2. The U.S. Food and Drug Administration created a brand-new device class for an AI that detects heart attacks off a standard electrocardiogram. The newly authorized “Queen of Hearts” system caught 92% of confirmed heart attacks on the first ECG, compared with 71% under standard care. False positives fell from 42% to 8%.
3. The FDA authorized the first autonomous robotic blood-draw device. It uses advanced imaging to find a vein, and then applies the elastic-band tourniquet, preps the skin, inserts the needle, swaps tubes, safely disposes of the needle, and bandages the wound. Its “stick-rate” performance is as good as a trained phlebotomist.
4. A “virtual biotech” staffed by 37,000 AI agents published research in Science. Led by Stanford University researchers, the system analyzed nearly 56,000 clinical trials and discovered rules to predict which drugs were most likely to reach the market.
5. GE HealthCare Technologies Inc. (GEHC) launched software that forecasts a hospital’s capacity crunch 72 hours ahead of time, and then ranks which discharges and transfers to move first. At least two major hospitals have already started using the product.
And this list barely scratches the surface.
In other words, AI in medicine has reached a tipping point. Specialized models are now powerful enough not only to assist researchers and clinicians, but also to do the work for them.
Here’s the best part for us investors…
Find the AI Boom Hiding in Healthcare
AI’s healthcare growth spurt has gone almost unnoticed by Wall Street. Major pharma bellwethers trade at below 12X forward earnings – levels usually seen by zero-growth firms with no AI plans. And this is happening even as AI is transforming the healthcare industry.
We see this as an incredible investment opportunity.
That’s because the “old” way of developing drugs was essentially like throwing spaghetti at a wall. Thousands of drugs would be tested with the hopes that one would work. The process was slow, expensive, and why so many drugs cost billions of dollars to develop.
AI is changing that.
With this new technology, drugmakers test millions of new therapies virtually, since AI can simulate how drugs will work. AI can also design clinical trials, monitor for side effects, and potentially knock years (and millions of dollars) off development costs.
Eric’s latest addition to his Fry’s Investment Report portfolio offers a powerful example.
It’s a major global pharmaceutical company using AI to speed up the development of lifesaving drugs. It has already used AI to help test thousands of molecules virtually, cutting drug identification time by 50%.
In fact, the company also recently launched its fastest-growing product launches ever. It took just 12 weeks to reach its first million prescriptions… and only four more weeks to add another million.
Learn how to get Eric’s latest healthcare research here.
And this is just one example. The Fry’s Investment Report portfolio includes other AI healthcare companies using AI that Wall Street is still largely ignoring.
So, we’re not worried that markets have so far overlooked how quickly AI is changing healthcare. Because when that moment comes – and it will – we’ll be invested in some of the cheapest, highest-quality names in the industry.
Until next time,
Thomas Yeung, CFA
Market Analyst, InvestorPlace
