AI leaders in healthcare for 2025 – Magic Post

AI stocks are expected to continue to show strong growth in 2025. Much attention is focused on the opportunity that comes from building data centers. But the practical area where AI has made significant inroads is healthcare.

For some investors, the first thing they turn to is on-device AI, which can be seen in smart devices and robotic surgical assistants. But there’s a lot more going on than that. Generative AI is being used to help make healthcare more efficient. This not only helps reduce employee fatigue, but also opens up prospects for personalized medicine.

This means that companies will spend money to increase their AI capabilities in this area. Many profitable companies will be able to pass some of this money on to shareholders in the form of dividends and/or capital gains. Here are three compelling medical stocks you should consider in 2025.

Google Health makes Alphabet a great choice

If you’re looking for growth stocks in 2025, Magnificent 7 stocks should be on your shortlist. However, in 2024, it became clear that investors were looking for value even among big tech stocks.

The same will be true in 2025, and here’s why Alphabet company Nasdaq:GoogleSounds like a buy. The company is practically synonymous with artificial intelligence, and the Google Health initiative is helping it make strides in the healthcare sector.

In addition to integrating AI into ultrasound and breast cancer screening tools, Alphabet has a series of large language models (LLMs) stemming from the launch of Med-PaLM 2 in 2023. For developers, Alphabet has launched its Open Health Stack Developer Help On “Accelerating the creation of digital health solutions.”

However, with the stock down to around $196, is GOOGL stock a buy? Analysts point out that it is. Although the consensus price of $206.69 leaves only 7% upside for the stock, analyst forecasts on MarketBeat show some much higher targets, including JPMorgan Chase & Co New York Stock Exchange: JPMWhich gives the stock a target of $232.

Medtronic uses artificial intelligence to make healthcare more efficient

The newly created Department of Government Efficiency (DOGE) had government waste on people’s minds, but waste and inefficiency in the health care system was an obsession for it. Medtronic plc New York Stock Exchange: MD For many years.

The medical device company is perhaps best known for its use of artificial intelligence in smart devices, such as robotic surgical assistance platforms, colonoscopy and endoscopy systems, and an insulin pen that integrates glucose sensor data for patients with type 1 diabetes who require multiple daily injections.

The company is also making strides in using artificial intelligence to analyze large amounts of data to help doctors diagnose and predict outcomes. In the process, it takes into account the growing need for personalized healthcare in treating diseases.

MDT stock fell about 11.5% in the three months ended December 30. Some of this may be due to fears that interest rates will remain high for longer. However, this represents a good opportunity to buy not only for its leadership in AI, but also for a dividend that has increased for 48 consecutive years.

Buy Stryker for profits now and growth later

Stryker Company New York Stock Exchange: Sick It is a competitor to Medtronic. Not surprisingly, many of the company’s AI innovations compare favorably with those of Medtronic and other names in the sector.

However, one area where Stryker may stand out is in its earnings. The yield isn’t particularly impressive at just 0.93% (Medtronic has a yield of 3.52%). But return isn’t everything. Stryker has a payout ratio more than 50% lower than Medtronic’s, and has grown its dividend at an average annual rate of 9% in the past three years. In addition, the company has increased its dividend for 32 consecutive years.

SYK stock gained about 20% in 2024, including a decline of about 8% in the last month of the year. This puts the stock about 12% below analysts’ consensus target.