“Healthcare is the most underappreciated AI beneficiary,” said Ark Invest CEO Cathie Wood in a recent statement that’s reverberating across Wall Street. As artificial intelligence revolutionizes fields like finance and marketing, its deeper impact may emerge in medicine, where breakthroughs in diagnostics, drug discovery, and patient monitoring are already unfolding. In response, hedge funds have begun to position themselves aggressively in companies poised to lead this transformation, placing bold bets on a new generation of healthcare AI leaders.
This article highlights the top 10 healthcare AI stocks to buy according to hedge fund activity. Major biotech firms like Moderna, which is leveraging AI in mRNA-based drug discovery, and Eli Lilly are now working with OpenAI to accelerate new medicine pipelines. Platform companies such as Tempus AI—known for its AI-powered diagnostic and sequencing tools—are attracting institutional capital, while legacy tech firms like IBM and Alphabet are re-emerging with dedicated healthcare AI platforms. Infrastructure providers like Nvidia are seeing investor interest, as their GPUs become essential to running large-scale health models. Together, these companies reflect a growing conviction among hedge funds that AI in healthcare isn’t just hype, it’s a long-term investment thesis with transformative upside.
Our Methodology
For this list, we noted down all stocks that fall under the umbrella of pure-play Healthcare AI stocks. These stocks were ranked based on the number of hedge fund investors that hold stakes in them, as of Q1 2025.
Note: All data was recorded on July 1, 2025.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Top 10 Healthcare AI Stocks to Buy According to Hedge Funds
10. Simulations Plus, Inc. (NASDAQ:SLP)
Number of Hedge Fund Holders: 13
Simulations Plus (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.
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.
9. Tempus AI, Inc. (NASDAQ:TEM)
Number of Hedge Fund Holders: 21
Tempus AI, Inc. (NASDAQ:TEM) is one of the top 10 healthcare AI stocks to buy according to hedge funds. On June 30, 2025, Guggenheim analyst Subbu Nambi reaffirmed a “Buy” rating on Tempus AI, Inc. (NASDAQ:TEM), while raising the firm’s price target from $65.00 to $75.00. The revised target reflects growing confidence in Tempus’ expanding role in transforming clinical care through precision medicine and data-driven insights.
Guggenheim’s updated price target follows steady progress in Tempus’ commercial partnerships and a growing footprint in both academic medicine and biopharmaceutical development. The analyst highlighted the company’s ability to scale its platform across specialties, pointing to its integrated software, sequencing, and analytics solutions as core strengths in a rapidly evolving healthcare landscape. As demand for personalized and evidence-based care accelerates, Tempus AI, Inc. (NASDAQ:TEM) is well-positioned to play a central role in the shift toward smarter, more predictive medicine. Guggenheim’s outlook underscores the firm’s belief that Tempus’ growth trajectory is both sustainable and strategically aligned with the future of healthcare delivery.
Tempus AI operates at the intersection of technology and healthcare, using one of the largest structured clinical and molecular data libraries in the world to personalize treatment decisions. The company works with hospitals, research institutions, and pharmaceutical firms to integrate real-world evidence into patient care, particularly in oncology, cardiology, and infectious diseases. Tempus’ proprietary platform uses machine learning and high-performance computing to uncover patterns in clinical and genomic data, enabling more accurate diagnoses and more effective therapies.
8.Schrödinger, Inc. (NASDAQ:SDGR)
Number of Hedge Fund Holders: 21
Schrödinger, Inc. (NASDAQ:SDGR) is one of the top 10 healthcare AI stocks to buy according to hedge funds. Schrödinger, Inc. (NASDAQ:SDGR) announced that its investigational drug SGR-1505 has received Fast Track designation from the U.S. Food and Drug Administration (FDA) for the treatment of adults with Waldenström macroglobulinemia who have not responded to at least two prior therapies, including a Bruton’s tyrosine kinase (BTK) inhibitor. The designation is designed to expedite the development and review of drugs that address serious or life-threatening conditions with unmet medical need.
SGR-1505 is a selective MALT1 inhibitor currently in clinical development. Waldenström macroglobulinemia is a rare type of non-Hodgkin lymphoma, and treatment-resistant forms present significant challenges for patients and clinicians. Schrödinger’s approach to drug discovery gives it a unique advantage in targeting such difficult diseases.
The company is best known for its computational platform that integrates physics-based modeling and advanced algorithms to design novel compounds with greater precision and efficiency. This model-driven strategy makes Schrödinger one of the few healthcare companies at the forefront of computational drug discovery—a field that blends molecular science with cutting-edge software to identify and optimize potential therapies faster than traditional methods.
With the FDA’s Fast Track status, SGR-1505 may benefit from more frequent interaction with the agency and potential eligibility for accelerated approval, positioning Schrödinger to advance an important treatment option while reinforcing its growing role as a technology-driven innovator in the pharmaceutical sector.
7. GeneDx Holdings Corp (NASDAQ:WGS)
Number of Hedge Fund Holders: 31
GeneDx Holdings Corp (NASDAQ:WGS) is one of the top 10 healthcare AI stocks to buy according to hedge funds. Guggenheim analyst Subbu Nambi has raised the price target for GeneDx Holdings Corp (NASDAQ:WGS) from $88.00 to $115.00, reinforcing a bullish stance on the company’s long-term trajectory. The “Buy” rating remains unchanged, signaling confidence in GeneDx’s market position and its potential to capture a growing share of the precision medicine space.
GeneDx, known for its deep expertise in rare disease genomics and next-generation sequencing, is emerging as a leader in healthcare innovation. The company blends advanced bioinformatics with clinical expertise to help physicians diagnose complex, genetically driven conditions more efficiently. Its platform leverages massive datasets and machine learning algorithms to interpret whole-genome and exome sequencing, placing it squarely in the center of the healthcare AI movement.
The price target hike reflects Guggenheim’s view that GeneDx is well-positioned to benefit from the increasing demand for personalized medicine and the broader integration of data-driven tools in clinical care. As health systems and biopharma partners seek faster, more accurate diagnostic solutions, GeneDx’s technology and scalable infrastructure make it a critical player in the shift toward AI-enabled healthcare. With momentum building across both clinical and commercial channels, the company appears to be gaining traction at a pivotal time for genomic medicine. The revised valuation underscores growing investor recognition of GeneDx’s role in transforming how rare and complex diseases are diagnosed and managed.
6. iRhythm Technologies, Inc. (NASDAQ:IRTC)
Number of Hedge Fund Holders: 31
iRhythm Technologies, Inc. (NASDAQ:IRTC) is one of the top 10 healthcare AI stocks to buy according to hedge funds. Morgan Stanley has raised its price target on iRhythm Technologies, Inc. (NASDAQ:IRTC) to $160 from $130, while maintaining an “Overweight” rating, citing strong early indicators for the company’s second-quarter performance. In a recent note to investors, the firm pointed to a surge in MyZio app downloads, which totaled 171,169 in Q2—up 74% year-over-year and 36% compared to the first quarter. The increase suggests iRhythm may outperform Street estimates, as most of the Zio patches generating revenue for the quarter have already been prescribed and tied to active monitoring.
Morgan Stanley highlighted that the strong app adoption signals growing patient engagement and broader acceptance of digital cardiac care, which bodes well for both short- and long-term growth. With scalable infrastructure and a rising volume of clinical data feeding its algorithms, iRhythm is not only improving detection but also redefining remote patient monitoring. As healthcare shifts toward personalized, tech-driven models, iRhythm’s innovation and execution place it among the leaders in digital diagnostics. Morgan Stanley views the company as a compelling investment amid increasing demand for smart, connected health solutions.
iRhythm Technologies, Inc. (NASDAQ:IRTC) develops and markets the Zio platform, a patch-based cardiac monitoring solution that leverages advanced analytics and machine learning to detect arrhythmias with clinical-grade accuracy. The company’s AI-enabled technology analyzes millions of heartbeats in real time, helping physicians diagnose conditions like atrial fibrillation more effectively than traditional methods.
5. Butterfly Network, Inc. (NYSE:BFLY)
Number of Hedge Fund Holders: 33
Butterfly Network, Inc. (NYSE:BFLY) is one of the top 10 healthcare AI stocks to buy according to hedge funds. Craig-Hallum analyst Chase Knickerbocker has initiated coverage of Butterfly Network, Inc. (NYSE:BFLY) with a Buy rating and a $3 price target, citing the company’s disruptive position in the point-of-care ultrasound market. Butterfly’s proprietary technology replaces traditional piezoelectric crystal-based ultrasound components with a chip-based semiconductor platform, allowing for a single probe to handle multiple imaging needs. This innovation not only reduces manufacturing complexity and cost, but also enables rapid software-driven improvements that set Butterfly apart from most handheld competitors.
The firm’s outlook is underpinned by Butterfly’s expanding direct-to-consumer (DTC) reach and a growing number of institutional partnerships, including leading health systems and academic centers. These relationships are expected to drive consistent hardware sales while building recurring revenue from software subscriptions.
Butterfly Network’s technology also places it at the forefront of healthcare’s digital transformation. By combining advanced imaging with real-time data interpretation and cloud-based collaboration tools, the company is integrating AI into clinical workflows to enhance diagnostic speed and accuracy.
4. Evolent Health, Inc. (NYSE:EVH)
Number of Hedge Fund Holders: 37
Evolent Health, Inc. (NYSE:EVH) is one of the top 10 healthcare AI stocks to buy according to hedge funds. JMP Securities reaffirmed its Market Outperform rating and $13.00 price target on Evolent Health, Inc. (NYSE:EVH), highlighting a more stable and promising outlook for the company. The firm described Evolent’s current risk/reward profile as “favorably skewed,” citing a series of operational improvements and strategic shifts that have put the company on firmer footing than in recent years.
Evolent, which provides value-based care solutions to payers and providers, has made notable progress in restructuring its risk-based arrangements and enhancing contracting mechanisms. These efforts have contributed to a healthier balance of performance obligations and upside potential. JMP noted that a strong pipeline of new business and improved visibility into existing partnerships support the firm’s bullish view. While 2025 is expected to be a trough earnings year, JMP expressed increased confidence in Evolent’s profit trajectory going forward. A key factor is the anticipated moderation in oncology-related cost trends, which have historically posed volatility in the company’s earnings profile.
Evolent Health, Inc. (NYSE:EVH) operates as a healthcare AI company, using predictive analytics and machine learning to manage complex populations, optimize clinical interventions, and reduce unnecessary costs. Its platform supports providers in making data-informed decisions, particularly in specialties like oncology and cardiology. With improved structural alignment and growing technological leverage, Evolent is well-positioned to capture long-term value in the transition to outcome-driven healthcare.
3. Veeva Systems Inc. (NYSE:VEEV)
Number of Hedge Fund Holders: 55
Veeva Systems Inc. (NYSE:VEEV) is one of the top 10 healthcare AI stocks to buy according to hedge funds. Veeva Systems (NYSE: VEEV) and Sarah Cannon Research Institute (SCRI) announced a strategic collaboration aimed at advancing oncology clinical trials across more than 200 research sites. Through this partnership, SCRI will implement Veeva’s Clinical Platform to unify its contract research and site operations on a single, cloud-based infrastructure. The move is expected to streamline workflows, reduce startup delays, and enhance coordination between clinical teams, ultimately accelerating the delivery of novel cancer therapies to patients.
According to Yazhene Krishnaraj, Chief Information and Digital Officer at SCRI, the platform will empower the institute’s teams to operate with greater precision and speed. Jim Reilly, President of Veeva Development Cloud, noted the collaboration is a “first-of-its-kind” and will set a new benchmark for clinical trial execution and site engagement. The initiative reflects both organizations’ commitment to improving trial efficiency at scale. The collaboration not only enhances SCRI’s operational capacity but also reinforces Veeva’s growing role in transforming clinical research through intelligent, AI-powered solutions.
Veeva’s Clinical Platform includes tools such as electronic data capture, clinical trial management, regulatory document tracking, and remote site monitoring—all integrated into one system. It also incorporates artificial intelligence and machine learning to identify trial risks, predict site performance, and flag data anomalies before they disrupt studies. These AI capabilities solidify Veeva’s position as a key player in healthcare technology, helping research organizations make faster, data-driven decisions.
2. Illumina, Inc. (NASDAQ:ILMN)
Number of Hedge Fund Holders: 60
Illumina, Inc. (NASDAQ:ILMN) is one of the top 10 healthcare AI stocks to buy according to hedge funds. Illumina, Inc. (NASDAQ:ILMN) announced recently that it has entered into a definitive agreement with Standard BioTools (NASDAQ:LAB) to acquire SomaLogic, a recognized leader in proteomics technology, for $350 million in cash at closing, along with up to $75 million in performance-based milestones and royalties. The deal includes the acquisition of SomaLogic’s proprietary proteomics platform and other specified assets, further strengthening Illumina’s position in multi-omic analysis and precision medicine.
SomaLogic’s platform enables high-throughput protein measurement and analysis, a critical advancement in understanding human biology at scale. By integrating these capabilities, Illumina aims to expand its clinical and research offerings into the proteomics space, complementing its core strength in genomics. This combination will provide researchers and clinicians with deeper biological insights, facilitating more informed decisions in drug development, diagnostics, and disease monitoring. The transaction is expected to close later this year, pending regulatory approvals and customary closing conditions.
As a long-time pioneer in genetic sequencing, Illumina, Inc. (NASDAQ:ILMN) continues to evolve into a broader healthcare technology company. The company has increasingly embraced artificial intelligence and machine learning to analyze complex biological data. These capabilities allow for more accurate predictions in clinical outcomes and therapeutic response, positioning Illumina as an emerging leader in healthcare AI. This acquisition marks a strategic step forward, giving Illumina the tools to integrate genomic and proteomic data at scale, an essential move toward enabling truly personalized medicine.
1. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Holders: 63
Medtronic plc (NYSE:MDT) is one of the top 10 healthcare AI stocks to buy according to hedge funds. Wolfe Research analyst Mike Polark recently upgraded Medtronic plc (NYSE:MDT) from Underperform to Peer Perform, citing short-term upside potential while maintaining a cautious long-term outlook. In a note to investors, Polark clarified that this is not a “Medtronic is fixed forever” call, but rather a recognition of near-term momentum, particularly driven by the ramp-up in its pulsed field ablation (PFA) technology following the Affera acquisition.
The Affera platform, which Medtronic integrated into its cardiac ablation portfolio, is gaining traction as a next-generation solution for treating atrial fibrillation. This growth area is expected to provide a meaningful lift to earnings, with the firm noting that FY26 estimates may prove “a touch favorable” based on current procedural trends and early adoption signals. While Wolfe Research remains reserved on broader structural challenges facing the company, including competition and operational complexity, the improving dynamics in cardiac rhythm and ablation technologies offer a reason to moderate their rating.
Beyond its hardware leadership, Medtronic plc (NYSE:MDT) has increasingly incorporated AI into its devices and digital health tools. From AI-powered diagnostics in its GI Genius platform to algorithm-driven insights in its cardiac monitoring solutions, the company is advancing the use of machine learning across multiple therapeutic areas. These capabilities underscore Medtronic’s evolution into a healthcare technology company, leveraging both device innovation and AI-driven analytics to improve outcomes and drive precision medicine.
While we acknowledge the potential of MDT 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 MDT and that has 100x upside potential, check out our report about this cheapest AI stock.
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