We recently compiled a list of the 10 Trending AI Health Stocks. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against the other AI health stocks.
According to Statista Market Insights, the worldwide artificial intelligence (AI) market is projected to reach a size of $184 billion in 2024. With a compound annual growth rate (CAGR) of 28.46% between 2024 and 2030, the market is expected to expand significantly, reaching a total value of $826.70 billion by 2030. In a global comparison, the United States is set to dominate with the largest market size, valued at $50.16 billion in 2024, leading the adoption and innovation in AI technology.
The global AI healthcare market is experiencing rapid expansion as well, driven by advancements in machine learning, automation, and precision medicine. With a market size of around $15.4 billion in 2022, it is projected to grow at a compound annual growth rate (CAGR) of 37.5%, reaching over $187 billion by 2030, according to estimates by Grand View Research. This growth is largely fueled by the increased adoption of AI in diagnostics, drug discovery, robotic surgery, and patient monitoring, as healthcare systems seek more efficient and cost-effective solutions.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
Reputable sources such as Fortune Business Insights and McKinsey report similar bullish projections, highlighting that AI’s applications in healthcare are expanding from diagnostics and imaging to personalized medicine and surgery. The FDA’s approval of numerous AI-driven tools in recent years underlines this shift. As AI permeates every level of healthcare, the demand for AI-enhanced devices and platforms continues to surge, resulting in massive investments, partnerships, and growing startup valuations, especially in medical imaging and AI-powered therapeutics.
According to Eric Topol, a renowned cardiologist and AI expert, AI is reshaping healthcare by enhancing precision in diagnostics and treatment. In his book “Deep Medicine: How Artificial Intelligence Can Make Healthcare Human Again,” Topol argues that AI not only boosts efficiency but also provides better patient outcomes through personalized medicine and improved medical imaging. He states, “AI has the potential to restore the human connection in medicine by allowing doctors more time to focus on their patients, while AI handles data analysis and routine tasks.” Topol envisions that AI will reduce physician burnout and transform healthcare delivery globally.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and AI News You Should Not Have Missed.
Our Methodology
For this article, we selected trending health stocks that have AI products driving meaningful revenue gains. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft’s AI capabilities are applied to healthcare through its Azure platform, which supports hospitals and pharmaceutical companies in data analysis, diagnostics, and personalized medicine. Microsoft Corporation (NASDAQ:MSFT) offers healthcare cloud solutions that have driven increased revenue from AI-powered tools for healthcare providers. Microsoft Corporation (NASDAQ:MSFT) recently unveiled new models within Azure AI Health Insights, which offers tools to help doctors, nurses and researchers make more informed decisions. The model, a patient timeline, gives clinicians a simple, chronological overview of a patient’s medical history by using generative AI to consolidate information from different unstructured data sources. The other model, called clinical report simplification, allows clinicians to use generative AI to simplify reports full of complex medical terminology into language that patients may understand better. And the final model, radiology insights, aims to help clinicians and radiologists by identifying errors and inconsistencies that can come up across different reports. The model can also offer follow-up recommendations.
Microsoft Corporation (NASDAQ:MSFT) has seen substantial growth in profits driven by its AI initiatives, particularly through its cloud services and AI-infused products. In fiscal year 2024, AI-related services contributed significantly to the company’s revenue growth, particularly in the Azure cloud platform, which saw a 30% increase in revenue, fueled by AI adoption. Microsoft reported an impressive 33% rise in overall profits during the second quarter of FY24, bringing net income to $21.9 billion, largely attributed to AI and cloud services expansion. With over 53,000 Azure AI customers and growing demand for AI-enhanced features, AI is becoming a major pillar of Microsoft’s business strategy.
Overall MSFT ranks 1st on our list of the trending AI stocks. While we acknowledge the potential of MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
