Investors looking to capitalize on the rapidly growing artificial intelligence (AI) industry tend to turn toward leading tech corporations. That’s understandable. Several major tech companies have produced amazing returns over the past few years thanks to their AI-related work. However, AI is changing every sector, and companies outside the tech industry will benefit from this revolution as well. With that said, let’s consider three healthcare stocks worth watching that are well-positioned to cash in on AI: Eli Lilly (NYSE: LLY), Novo Nordisk (NYSE: NVO), and Intuitive Surgical (NASDAQ: ISRG).

The Growing Role of AI in Healthcare

Artificial intelligence is no longer a futuristic concept—it’s an integral part of modern healthcare. From drug discovery to personalized treatment plans, AI is transforming how medical professionals diagnose, treat, and manage patient care. Traditional methods are being augmented with machine learning algorithms that can analyze vast amounts of data quickly and accurately.

In the pharmaceutical industry, for example, developing new drugs is a costly and time-consuming process. It often takes over a decade and costs billions of dollars to bring a single drug to market. AI has the potential to streamline this process by identifying promising compounds faster and reducing the risk of clinical failures. This shift is attracting attention from both tech giants and traditional healthcare companies, many of which are now investing heavily in AI research and development.

Eli Lilly: Leveraging AI for Drug Discovery

Eli Lilly, a global leader in pharmaceuticals, is at the forefront of integrating AI into its drug discovery process. The company has partnered with Nvidia to build one of the most powerful supercomputers in the industry, which will help accelerate the identification of new therapeutic candidates.

AI can significantly reduce the time and cost associated with drug development by analyzing biological data and predicting how different compounds might interact with human cells. For Eli Lilly, this means potentially shortening the drug discovery phase—which typically takes three to six years—by a year or more. This could lead to substantial cost savings and allow the company to bring new treatments to market faster.

Eli Lilly is already a strong player in weight management drugs, with products like Zepbound and Foundayo driving growth. As AI continues to enhance its R&D capabilities, the company may be able to expand its portfolio even further. Investors should keep an eye on how Eli Lilly leverages these technologies to maintain its competitive edge.

Novo Nordisk: AI-Driven Innovation in Obesity and Diabetes

Novo Nordisk is another healthcare company that’s making significant strides in integrating AI into its operations. The Danish pharmaceutical giant has partnered with OpenAI, a leader in developing cutting-edge AI models, to enhance drug discovery and development processes.

Beyond just drug discovery, Novo Nordisk is using AI to improve various aspects of its business, including manufacturing, supply chain management, and patient engagement. However, the most promising application of AI for the company lies in accelerating the development of new treatments for obesity and diabetes—two areas where it has a strong presence.

One of the more exciting projects under Novo Nordisk’s pipeline is UBT251, an investigational drug that mimics the actions of three gut hormones: GLP-1, GIP, and glucagon. This multi-hormonal approach could lead to greater efficacy than current treatments like Wegovy, which target only a single hormone.

Despite recent challenges, including slowed sales growth in its obesity division and clinical setbacks, Novo Nordisk remains well-positioned to benefit from the expanding weight-management market. With AI helping to speed up drug development, the company may be able to regain momentum and deliver strong long-term returns.

Intuitive Surgical: Enhancing Surgery with AI

Intuitive Surgical is a pioneer in robotic-assisted surgery (RAS), best known for its da Vinci surgical system. The company has dominated this niche market since launching the da Vinci system in 2,000, thanks to its innovative technology and strong intellectual property.

Now, Intuitive Surgical is looking to take its lead even further by integrating AI into its operations. By analyzing data from thousands of procedures, the company aims to improve the safety and effectiveness of surgeries performed with its robotic systems. This could result in better patient outcomes and increased adoption of RAS technologies across hospitals worldwide.

While the company has faced challenges such as tariffs and increased competition, Intuitive Surgical continues to generate strong revenue and earnings. Its wide moat—built on a large dataset, high switching costs, and patents—should help it maintain its leadership position even in a more competitive landscape.

Why This Matters for Investors

The integration of AI into healthcare is not just a trend—it’s a fundamental shift in how medical research and treatment are conducted. As companies like Eli Lilly, Novo Nordisk, and Intuitive Surgical invest heavily in AI, they’re positioning themselves to benefit from the growing demand for more efficient and personalized healthcare solutions.

For investors, this means there are opportunities beyond traditional tech giants. These healthcare stocks are not only leveraging AI to improve their operations but also creating new value through innovation and efficiency gains. As AI continues to evolve, the companies that successfully adapt will likely outperform their peers.

Potential Impact on the Industry

The impact of AI in healthcare is expected to be profound. In drug discovery alone, AI could reduce development times by up to 50%, leading to faster access to life-saving treatments. For surgical procedures, AI-driven robotics may improve precision and reduce recovery times, making surgeries safer and more effective.

Moreover, as AI becomes more integrated into medical decision-making, it will also help address some of the challenges facing the healthcare industry today, such as rising costs, limited access to care, and the need for personalized treatment plans. These changes could lead to a more efficient and equitable healthcare system in the years ahead.

Conclusion

The integration of artificial intelligence into healthcare is reshaping how medical research, treatment, and patient care are delivered. Companies like Eli Lilly, Novo Nordisk, and Intuitive Surgical are not only adapting to this change but also leveraging AI to drive innovation and efficiency. As these companies continue to invest in AI technologies, they are well-positioned to benefit from the growing demand for smarter healthcare solutions.

For investors, keeping an eye on how these healthcare stocks incorporate AI into their strategies will be crucial. The next few years could see significant advancements in drug discovery, surgical precision, and personalized medicine—all driven by artificial intelligence. As the industry evolves, those who understand and invest in this transformation may find themselves at the forefront of a new era in healthcare.

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