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Craig-Hallum Trims Simulations (SLP) Price Target, Maintaining a Buy Rating

Simulations Plus, Inc. (NASDAQ:SLP) is one of the top 10 healthcare AI stocks to buy according to hedge funds.

Simulations Plus, Inc. (NASDAQ:SLP), a leading provider of modeling and simulation software for pharmaceutical research, saw its price target lowered by Craig-Hallum to $36 from $45 following a cautious Q3 pre-release and a downward revision of its fiscal year 2025 guidance. Despite maintaining a Buy rating, the firm highlighted growing macroeconomic headwinds that are weighing on the company’s services segment. Clients have reportedly been slow to initiate new contracts, delay clinical trials, and hold off on major spending decisions—a trend that’s been broadly felt across the healthcare landscape.

A close-up view of a scientist’s hand pressing keys on a laptop as another looks closely at a 3-D model on a large monitor.

However, Simulations Plus’ core software segment remains resilient. Known for its predictive modeling platforms used in drug discovery and development, the company plays a key role in advancing New Approach Methodologies (NAMs), which aim to modernize and reduce reliance on traditional clinical trials. These technologies, essential in streamlining the drug development process, are gaining broader acceptance across regulators and pharmaceutical companies, solidifying Simulations Plus’ role in a rapidly evolving healthcare ecosystem.

Craig-Hallum sees long-term potential in this structural shift. While near-term disruptions may cloud visibility, the firm notes that Simulations Plus continues to operate in a growing, innovation-driven market. For investors looking to align with the digital transformation of drug development, the company represents a compelling opportunity rooted in both regulatory trends and scientific advancement.

While we acknowledge the potential of SLP to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SLP and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 13 Best Biotech Stocks To Invest In Now and 12 Best Healthcare Stocks to Buy Now.

Disclosure: None.

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