You won’t read about these stocks in the mainstream media. The average investor doesn’t even know they exist. But don’t let that fool you: because a small “hidden” group of companies is figuring out how to merge artificial intelligence with medical technology.
AI in real life isn’t what you see in the movies. It’s not about robots or computers that outthink and enslave humans. It’s about computers with mind-boggling processing powers that solve problems faster than teams of scientist PhDs ever could.
Other investors ignore AI because they assume its impact will be felt for decades. But AI is already improving your life in ways you probably don’t even realize. AI is why Netflix (NFLX) is so good at recommending movies. And why Spotify (SPOT) is so good at recommending music that suits your tastes. It’s also how Amazon’s (AMZN) Alexa can tell you everything from the weather to who America’s fourth president was in just seconds. AI is also how Tesla’s (TSLA) Model X can navigate traffic on the highway on its own without you laying a finger on the steering wheel!
These breakthroughs are all thanks to AI. But they’re just a taste of what’s to come.
There’s Still Time to Make Life-Changing Money off AI Healthcare Stocks
According to tech entrepreneur and Dallas Mavericks owner Mark Cuban, the world’s first trillionaire won’t be a hedge fund manager, oil baron, or social media tycoon. It will be someone who masters AI.
A trillion dollars is almost an unfathomable amount of money. To put this in perspective, Amazon founder Jeff Bezos—the world’s richest man—is worth around $117 billion. That’s more than the annual economic output of Ecuador. And yet, a trillionaire would be worth at least ten times as much as Bezos!
But here’s the thing. You don’t have to be a genius inventor or entrepreneur to strike gold in AI. Just like prior megatrends, everyday investors stand to make millions off of AI.
According to ARK Invest, AI could add $30 trillion to the global equity markets over the next two decades. That’s almost as much as the entire US stock market is worth today!
And the best way to take advantage isn’t with traditional AI companies. As I mentioned above, it’s with “AI healthcare stocks.” The fusion of AI and healthcare is one of the most lucrative opportunities I’ve come across in my entire career.
AI Is Already Making It Cheaper, Faster, and Easier to Understand How the Coronavirus Spreads
Researchers at MIT have already used AI to identify a powerful new antibiotic compound for the coronavirus. Scientists in China were able recreate and copy the coronavirus’ genome sequence in just one month! Chinese tech giant Alibaba (BABA) recently created a new AI algorithm that can diagnose the coronavirus in as little as 20 seconds! That’s 45 times faster than humans can. And it’s reportedly 96% accurate.
Insilico Medicine used AI to successfully identify thousands of molecules for potential medications in just four days. Additionally, the Food and Drug Administration recently approved the use of an AI-driven diagnostic for COVID-19 developed by AI radiology company Behold.ai. The tool analyzes lung x-rays and provides radiologists with a tentative diagnosis as soon as the image is captured, reducing time and expense.
In short, AI will likely be the reason we never experience an outbreak like the coronavirus again. But that’s certainly not the only way AI is revolutionizing healthcare.
AI is also being used to identify a drug candidate that could be repurposed for different uses. It can also help medical professionals parse through data faster than ever before. I cannot overstate the importance of this. Every year, 1.2 billion unstructured clinical documents are created every year. A staggering amount of data is contained in these documents. And that’s only going to increase. The amount of medical data is poised to double every couple of months! It’s nearly impossible to search and make sense of this data without the help of AI.
AI Will Also Help Usher in the Era of Personalized Medicine
“Genomics” companies will play a major role in this revolution. But AI will play a massive role in this revolution, too.
You see, analyzing genomic sequences takes time and a ton of computing power. AI rapidly accelerates this process. It greatly reduces the time it takes to develop valuable drugs. Not only that, it drives down drug development costs. And increases the success rate of trials.
Money is pouring into AI companies at a breathtaking rate. According to CB Insights, $4 billion was invested in private healthcare AI startups last year. And that included 367 deals. That was the most money of any sector!
It’s also a huge spike from 2018 when $2.7 billion was invested across 264 deals. It’s easy to see why venture capitalists (VC) are betting so big on healthcare AI. According to Grand View Research, the market is growing at nearly 42% per year! By 2025, it’s projected to be a $31 billion industry. When an industry grows this fast, fortunes stand to be made.
You No Longer Need to Be a VC or Angel investor to Profit from This Booming Market
You can get in on the ground floor of this trend by buying the right “AI healthcare stocks.” I’m not talking about Microsoft (MSFT), Amazon (AMZN), or any other blue-chip tech company using AI for their healthcare initiatives. These companies are already behemoths. They don’t offer explosive upside.
So, I wouldn’t focus on the usual suspects. Instead, pay attention to the smaller AI healthcare stocks. Many of which have gone public recently. These are still unknown to most of the investing world. And they offer the best chance to multiply your money in the coming months.
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At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:
Article by Justin Spittler, Mauldin Economics