12 Best AI Drug Discovery Stocks Hedge Funds Are Loading Up On

In this article, we will discuss: 12 Best AI Drug Discovery Stocks Hedge Funds Are Loading Up On.

On  May 27, Reuters reported that Biohub, a philanthropic venture formed by Meta CEO Mark Zuckerberg and Dr. Priscilla Chan, developed a global model of protein biology to speed up drug discovery. The AI system is based on fourth-generation evolutionary scale modeling, or ESM. As per the group, the open-source model is trained from protein sequences shaped by evolution and uses that data to design proteins. Chan told Reuters, “We’ve verified the model’s ability and validated many of its predictions in both immune diseases and cancer cases,” and expects widespread use across laboratories.

According to Biohub’s head of science, Alex Rives, the platform will run on Biohub.ai, partner systems, and cloud platforms such as AWS Bio Discovery and SandboxAQ, with researchers receiving computing credits. Biohub stated that researchers have already used the model to build protein binders for cancer and immune targets that reactivate immune cells in lab tests. It will integrate its biomedical research under Biohub in November 2025, following the acquisition of EvolutionaryScale. Rives said that the organization will also extend relationships with external partners to increase access and implementation across biological analysis platforms.

With that said, here are the  12 Best AI Drug Discovery Stocks Hedge Funds Are Loading Up On.

Methodology:

We used screeners to identify AI Drug Discovery Stocks and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds. We then identified those with the highest number of hedge fund holders, which we assessed using Insider Monkey’s database of hedge funds as of Q1 2026. The stocks are ranked in ascending order of the number of hedge fund holders.

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12. SOPHiA GENETICS SA (NASDAQ:SOPH)

Number of Hedge Fund Holders: 9

On June 4, 2026, SOPHiA GENETICS SA (NASDAQ:SOPH) reported that it signed a Memorandum of Understanding with Memorial Sloan Kettering Cancer Center to form a proposed joint venture aimed at building a precision medicine hub for next-gen precision oncology.

The firms stated the initiative would combine MSK’s clinical diagnostics and genomic datasets. Over 150,000 tumor samples sequenced since 2014 with SOPHiA GENETICS’ SOPHiA DDM™ platform. It has analyzed more than 2.5 million cases to help the discovery and development of oncology tools.

SOPHiA GENETICS SA (NASDAQ:SOPH) President Ross Muken said the collaboration represents an expansion of prior MSK partnerships. Ross stated that SOPHiA DDM™ is a foundational AI and analytics layer designed to extend MSK clinical intelligence globally.

MSK Director of Digital Health Business Development Michael G. Frank said the effort plans to combine clinical expertise with AI and digital infrastructure to deliver customized insights and transform cancer care at scale.

SOPHiA GENETICS SA (NASDAQ:SOPH) is a healthcare technology company that practices data-driven medicine as the standard of care and for life sciences research. It functions through France, Italy, the United States, Spain, Turkey, Austria, Brazil, the United Kingdom, Switzerland, Germany, and Other segments.

11. Generate Biomedicines, Inc. (NASDAQ:GENB)

Number of Hedge Fund Holders: 16

On May 14, Morgan Stanley increased its price objective on Generate Biomedicines, Inc. (NASDAQ:GENB) to $22 from $20. The firm maintained an “Overweight” rating on the shares.

Separately, Generate Biomedicines, Inc. (NASDAQ:GENB)’s GB-0895 (anti-TSLP) program keeps advancing in Phase 3 global SOLAIRIA-1 and SOLAIRIA-2 trials for severe asthma. It is also making progress in an ongoing Phase 1b COPD study.

Chief Executive Officer Mike Nally said the corporation is moving forward with its clinical pipeline across inflammation and oncology. The firm is expecting to progress two oncology programs in 2026.

Generate Biomedicines, Inc. (NASDAQ:GENB) said GB-4362, an MMAE neutralizer with FDA Fast Track designation, has activated clinical trial sites with first patient dosing expected in mid-2026. Meanwhile, GB-5267, which is an MUC16 armored CAR T developed with Roswell Park Comprehensive Cancer Center, is expected to dose its first patient in the second half of 2026 in a Phase 1 solid tumor trial initially targeting ovarian cancer.

Generate Biomedicines, Inc. (NASDAQ:GENB) is a clinical-stage generative biology company that is leading the artificial intelligence revolution in biotechnology, drug design, and development.

10. AbCellera Biologics Inc. (NASDAQ:ABCL)

Number of Hedge Fund Holders: 20 

AbCellera Biologics Inc. (NASDAQ:ABCL) is among the Best Pharmaceutical Stocks.

On June 17, 2026,  AbCellera Biologics Inc. (NASDAQ:ABCL) and Jazz Pharmaceuticals entered a preclinical research collaboration, option, and license agreement. The deal is to discover and develop next-generation T-cell multispecific antibodies targeting gastrointestinal cancers and other solid tumors.

The companies said the partnership includes $56 million in upfront payments to AbCellera Biologics Inc. (NASDAQ:ABCL) and up to $792 million in potential option fees and milestone payments for programs Jazz elects to advance. Jazz holds the exclusive option to develop and market resulting therapeutic antibodies.

AbCellera founder and CEO Carl Hansen, Ph.D., said the deal leverages its T-cell engager platform. Hansen described it as a fully integrated system covering discovery to clinical manufacturing, designed for developing multispecific antibodies for difficult-to-treat cancers.

Jazz Pharmaceuticals chief scientific officer in oncology, Josh Allen, Ph.D., said the collaboration is in line with Jazz’s rare disease strategy, growing its oncology focus into GI cancers.

AbCellera Biologics Inc. (NASDAQ:ABCL) works in the making of therapeutic antibodies. It gives an antibody discovery platform that searches, decodes, and analyzes natural immune systems to identify antibodies that can be produced to prevent and treat disease.

9. Absci Corporation (NASDAQ:ABSI)

Number of Hedge Fund Holders: 23

On June 15, Guggenheim raised its price target on Absci Corporation (NASDAQ:ABSI) to $15 from $10. The analyst maintained a “Buy” rating on the stock after a deeper review of ABS-201 ahead of interim proof of concept data expected in the second half of 2026.

Separately, Absci Corporation (NASDAQ:ABSI)’s ABS-201 carries more than $5 billion unadjusted US sales potential. It is expanding to over $8 billion, including former US markets.

Absci Corporation (NASDAQ:ABSI) CEO Sean McClain, speaking on recent developments, said: “2026 is going to be a data-rich year.” He commented that ABS-201, which is an AI-designed anti-prolactin receptor antibody for androgenetic alopecia, could represent a new mechanism of action in nearly three decades, with a dosing interval of only a few injections per year.

McClain also announced ABS-202, a second anti-PRLR antibody in preclinical development for an undisclosed inflammation and immunology indication as part of an expanded pipeline built on prolactin biology.

The corporation reported completion of four SAD cohorts in its Phase 1/2a HEADLINE trial. It stated ABS-201 remains well tolerated with favorable safety data and supporting PK modeling for dosing every two to three injections over six months.

Absci Corporation (NASDAQ:ABSI) is a medication and target discovery business that uses deep learning AI and synthetic biology to improve the therapeutic potential of proteins. It collaborates with pharmaceutical and biotech developers to develop the next generation of protein-based medicines.

8. Schrödinger, Inc. (NASDAQ:SDGR)

Number of Hedge Fund Holders: 31

Schrödinger, Inc. (NASDAQ:SDGR) is among the Best Pharmaceutical Stocks.

On May 14, Morgan Stanley lowered its price target on Schrödinger, Inc. (NASDAQ:SDGR) to $17 from $19. The firm maintained an “Equal Weight” rating on the shares.

Separately, Schrödinger, Inc. (NASDAQ:SDGR) maintained full-year guidance for ACV of $218 million to $228 million. The corporation expects 10% to 15% growth over 2025, while projecting drug discovery revenue of $55 million to $65 million and operating expenses below 2025 levels.

The company guided second quarter 2026 ACV at $19 million to $23 million as compared to $23.3 million in the prior-year period, which included $5.0 million of contribution ACV.

Separately, the corporation also announced plans for an early access release of its artificial intelligence co-scientist “Bunsen” this summer. The firm described it as an agentic system that autonomously executes molecular discovery workflows and is already used internally throughout research programs.

Schrödinger, Inc. (NASDAQ:SDGR) works in the provision of chemical simulation software solutions to the pharmaceutical industry. It functions through the Software and Drug Discovery business segments.

7. Novartis AG (NYSE:NVS)

Number of Hedge Fund Holders: 31

Novartis AG (NYSE:NVS) is among the Best Pharmaceutical Stocks.

On June 11, Novartis AG (NYSE:NVS) reported that an experimental drug acquired through its $12 billion Avidity Biosciences deal showed promise in an early to mid-stage study for facioscapulohumeral muscular dystrophy. Del-brax lowered two disease-linked blood markers and reduced signs of muscle damage in patients with the genetic disorder. The company said the therapy may become the first disease-modifying treatment for FSHD. It is a condition affecting an estimated 45,000 to 87,000 people in the US and EU. The firm also noted its safety profile remained consistent with prior results, and a late-stage study is now enrolling patients.

Separately, Reuters reported on May 31 that  Novartis AG (NYSE:NVS) said early data from an actinium-based radiopharma drug had anti-tumor activity in advanced prostate cancer. It included PSA reductions in a 101-patient study, with more than 85% response in untreated patients and 52.5% in those previously treated with Pluvicto. Chief Medical Officer Shreeram Aradhye said larger trials are needed to assess side effects. TD Cowen analysts flagged dry mouth and severe anemia as major risks and noted the corporation is advancing two late-stage studies, along with expanding isotope supply planning.

 Novartis AG (NYSE:NVS) is a holding company that works in the business of developing, manufacturing, and marketing healthcare products.

6. Tempus AI, Inc. (NASDAQ:TEM)

Number of Hedge Fund Holders: 33

On June 11, 2026, Tempus AI, Inc. (NASDAQ:TEM) announced that a multi-center validation of its artificial intelligence ECG software for predicting one-year atrial fibrillation or flutter risk was published in Heart Rhythm.

The company stated the study, titled “Multi-Center Validation of an Artificial Intelligence-Enabled ECG Model to Predict 1-Year Risk of Atrial Fibrillation or Flutter,” assessed its ECG-AF software across three geographically individual clinical sites. It analyzed data from 4,017 patients aged 65 and older without prior atrial fibrillation and without pacemaker or defibrillator use.

The firm reported that the ECG-AI-derived risk score surpassed pre-specified performance thresholds. The firm said the findings supported its 2024 FDA clearance for the technology.

Brandon Fornwalt, MD, PhD, SVP of Cardiology at Tempus and coauthor, said the study “marks an important step toward shifting cardiac care from late-stage intervention to early risk detection,” and stated the model “consistently predicts atrial fibrillation across varied clinical environments.”

The corporation also stated that ECG-AF is FDA-cleared for analyzing 12-lead ECGs to detect signs associated with AF within 12 months.

Tempus AI, Inc. (NASDAQ:TEM) is a healthcare technology business. It combines artificial intelligence and machine learning with healthcare. It focuses on establishing platforms for cancer, neuropsychiatry, cardiology, infectious illness, and radiology.

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