3 Healthcare Firms Using AI to Revolutionize the Industry

Invest in a new standard of patient care with these stocks.

Vikram Barhat 17 April, 2024 | 4:33AM
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Healthcare icons and AI symbol

Artificial Intelligence (AI) is fast emerging as a transformative force in healthcare.  With an increasing number of healthcare firms integrating AI into their products and processes, the industry is entering a new era of improved treatments, operational efficiencies, and cost savings.

As a result, the global AI in the healthcare sector is experiencing exponential growth. The market is projected to skyrocket from US$23 billion in 2023 to a whopping US$431 billion by 2032, growing at a 38.2% compound annual growth rate, according to Polaris Market Research.

The following healthcare names are early adopters of AI and are poised to reap rich rewards as they revolutionize and reshape the health and medicine landscape. These pioneering firms are set to emerge as the industry's trailblazers, shaping the future of patient care and healthcare delivery with AI-driven solutions.


Intuitive Surgical develops, produces, and markets a robotic system for assisting minimally invasive surgery. The company also provides the instrumentation, disposable accessories, and warranty services for the system. Intuitive has its systems placed in hospitals worldwide, with more than half of its installations in the U.S. and a growing number in emerging markets.

Intuitive has utilized artificial intelligence to enhance overall healthcare delivery. The company is harnessing integrated AI by leveraging advancements in processing power and connectivity to deliver actionable data, aiding hospitals and surgeons in understanding and quantifying robotic surgical performance.

Intuitive Surgical continues to enjoy the benefits of the widespread adoption of AI and robotic surgery, thereby significantly enhancing patient outcomes.

“Our long-term positive view about the company's competitive positioning is unchanged even as new competitors have finally arrived on the scene, and with the release of the next-generation platform, Intuitive should maintain its dominance,” says a Morningstar equity report.

The greater adoption of artificial intelligence in robotic surgery “could be a threat to [the firm’s wide] moat, but also an opportunity as Intuitive through its massive installed base and procedures history would be in a leading position to capitalize on advancements in this area,” says Morningstar equity analyst Alex Morozov, who recently raised the stock’s value to US$253 from US$230, prompted by the company's strong performance in general surgery.

Despite surpassing 2 million procedures in 2023, there are ample growth opportunities for Intuitive in the much larger global market, he adds.


A leading provider of diabetes-care products in the world, Novo Nordisk makes and markets a variety of human and modern insulins and other diabetic and obesity treatments. The firm also has a biopharmaceutical segment (roughly 10% of revenue) that specializes in protein therapies for hemophilia and other disorders.

The Danish pharmaceutical giant has collaborated with Nvidia to co-develop pharmaceutical and biotechnology solutions as well as develop quantum computing.

"Groundbreaking scientific discoveries are based on data, and AI has now provided us with an unprecedented opportunity to accelerate research within, for example, human and planetary health," says Mads Krogsgaard Thomsen, chief executive of Novo Nordisk Foundation.

Accelerated computing holds the potential to galvanize clinical data processing and potentially enhance accuracy. Resultantly, pharmaceutical companies such as Novo Nordisk could broaden the identification of indications or speed up the development of new drugs.

A pioneer in diabetes care, Novo has captured 32% of the US$50 billion-plus diabetes treatment market and roughly half of the more than US$15 billion insulin market.

“Diabetes’ prevalence is expected to soar in coming decades as a result of an increasingly overweight and aging population, and we expect Novo to maintain its wide moat as it continues to dominate in diabetes and obesity therapy innovation,” asserts Morningstar equity analyst Karen Andersen, who recently upped the stock’s fair value estimate to US$84 per ADR from US$80, incorporating slightly increased sales expectations and operating margin improvements.


Medical device maker, Stryker designs and produces a range of medical equipment, instruments, consumable supplies, and implantable devices. Its impressive product portfolio comprises hip and knee replacements, endoscopy systems, operating room equipment, embolic coils, hospital beds and gurneys, and spinal devices.

More than a quarter of Stryker's revenue comes from outside the U.S. market.

The orthopedic device maker is expanding its presence in the artificial intelligence space, according to CEO Kevin Lobo. As part of that plan, the company has been making strategic acquisitions to boost its AI capabilities. Stryker currently offers a range of AI products, including Mako, the firm’s robotic-arm-assisted surgery platform, which is used in numerous knee and hip procedures.

Stryker remains the king of the hill in several medical markets, including orthopedic implants, surgical instruments, endoscopy, and neurovascular devices. “It enjoys a long record of innovation in its key markets, and we anticipate the pattern will continue, allowing the wide-moat company to earn attractive economic profits,” says a Morningstar equity report.

The firm boasts a wide economic moat across its key businesses. Its orthopedic segment remains particularly moat-y “because of significant switching costs for surgeons, who are still influential decision-makers for implant brand choice,” says Morningstar equity analyst Debbie Wang, who recently raised the stock’s fair value to US$242 from US$229, reflecting more optimistic estimates for the 2024-25, supported new product launches and strong execution.



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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Intuitive Surgical Inc398.82 USD0.60Rating
Novo Nordisk A/S ADR131.89 USD-0.86Rating
Stryker Corp334.68 USD0.21Rating

About Author

Vikram Barhat

Vikram Barhat  is a Toronto-based financial writer specializing in investing, stock markets, personal finance and other areas of the financial services industry, Vikram also writes for CNBC, BBC, The Globe and Mail, and Toronto Star.

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