2020 may well have been one of the most significant years for the healthcare industry in decades, as companies produced COVID-19 vaccines at lightning speed.
Artificial intelligence (AI) was a major player in creating a COVID-19 vaccine in literally record time, with several big-time healthcare companies — Pfizer (NYSE:PFE), AstraZenenca (NASDAQ:AZN) and Moderna (NASDAQ:MRNA) — bringing COVID-19 vaccines to market in a matter of months. For some perspective, it took about four years for the mumps vaccine to be rolled out in the 1960s.
So far, 5.3 million people have been vaccinated in the U.S. Healthcare workers and residents of long-term care facilities were offered the vaccine first. Next in line to be vaccinated are frontline essential workers and people over the age of 75.
The reality is AI plays a huge role in the future of healthcare, due to its predictive analysis and essentially limitless access to information. All of the drug trial and vaccine data that needed to be analyzed was done significantly faster thanks to the help of AI.
The technology also aided researchers by suggesting chemical modifications, identifying existing drug candidates that could be repurposed, and scanning other research from data libraries to assist in the making of the vaccine.
Outside of vaccines, AI assisted in predicting COVID-19 patient outcomes. An algorithm was created using lab test and chest x-ray data to determine who is at the highest risk of needing intubation once arriving at the hospital. This helped doctors make more informed decisions and, ultimately, saved lives.
All of this AI technology is helping the healthcare industry grow at an incredible rate. Since 2018, the sector has increased by an average of 4.5%. In 2019 alone, Americans spent $3.65 trillion on healthcare, which amounts to 17.8% of the entire GDP.
Clearly, there’s a significant amount of growth that remains in this sector, and to my InvestorPlace colleague, Matt McCall, and me, that spells opportunity.
It’s why we recommended a healthcare company with a new type of software that assists in drug discovery and development to our Power Portfolio 2021 in December. It can help predict better drug study outcomes, help scientists have a better understanding of potential new medicines and use data to improve drug formulas and optimize their designs.
We like that the company sees only one significant competitor at the moment. While new competition can never be ruled out, the barriers for entry in the software industry are high thanks to regulatory considerations.
This strong competitive position has led to consistent revenue growth and increasing profitability over the last five years. The company has no debt and a growing cash balance, positioning it well to invest for more growth both internally and through further acquisitions.
This isn’t the only healthcare company we like right now, there are three other companies in our Power Portfolio that are great buying opportunities
The bottom line: There’s a lot of potential in the healthcare space thanks to new technologies, and we believe that we have found the best high-quality stocks to play the massive upside.