Hailed as the cornerstone of Industry 4.0, the Artificial Intelligence (“AI”) revolution has intrigued the world, sparking a mix of excitement and apprehension. Not very far away is its subset, Generative AI (GenAI), which is rapidly advancing to become a $1.3 trillion market by 2032 from a mere $40 billion valuation in 2022, according to a Bloomberg Intelligence report. GenAI differs from the conventional AI, creating visual assistance, text, images, videos and more based on learned patterns of their input training data.

In the realm of Medical Technology or MedTech, AI employs sophisticated techniques like natural language processing, machine learning and computer vision to demystify complex medical information. GenAI holds great potential for enhancing diagnostic precision and optimizing treatment strategies.

GenAI has already showcased its proficiency across a range of healthcare fields, from time-consuming administrative tasks to critical areas like drug discovery and clinical trials. Within the competitive landscape of rapid product introductions, GenAI-powered medical devices allow companies to promptly meet the tailored needs of patients, eventually capturing more market share.

In this promising context, we take a look at these MedTech industry stalwarts, such as Zimmer Biomet (ZBH Quick QuoteZBH - Free Report) , GE HealthCare (GEHC Quick QuoteGEHC - Free Report) and Medtronic (MDT Quick QuoteMDT - Free Report) , who are stepping forth to embrace the game-changing technology.

Below, we briefly explore some of the vital areas where GenAI is driving impactful changes.

Medical Imaging Efficiency: Technologies like generative adversarial networks and variational autoencoders enhance medical image interpretation by synthesizing patient data and aiding medical professionals in diagnosis and treatment strategies.  

Customized Treatment Plans: GenAI enables personalized treatments by diving deep into a patient’s medical history, lifestyle choices and genetic makeup to predict potential health risks more accurately, facilitating early interventions. This marks a groundbreaking shift from the traditional one-size-fits-all treatment approach.

Enhanced Surgical Precision: GenAI can greatly benefit surgeries by extracting patient information and providing procedural simulations. It assists in interoperative decision-making and supports post-operative discharge and follow-up, providing real-time feedback and storing it for later use.

Accelerating Drug Discovery: Using complex algorithms, GenAI can design new molecular structures and predict how they will affect the body. It speeds up the process of finding new drugs by making it easier to identify and test new compounds.

Virtual Medical Assistants: The importance of GenAI-driven chatbots and virtual assistants is growing to be paramount, with functions like immediate assistance, timely medication reminders and predicting patient healthcare needs.

Medical Stocks in Focus

Let’s discuss the aforesaid three prominent companies that have integrated AI into their operations and are poised for significant expansion.

Specializing in orthopedic reconstructive products, Zimmer Biomet has a suite of integrated digital and robotic technologies that utilize data, data analytics and AI. Back in 2022, the company released its first AI-based solution, WalkAI, to create daily personalized outcome predictions based on a patient's gait recovery.  It also developed an intelligent operating room called Omni Suite to optimize surgical workflow and procedural efficiency by automating manual tasks and streamlining unnecessary technology and redundant hardware.

The company recently announced a multi-year co-marketing agreement with the software-as-a-service (SaaS) health technology company, RevelAi Health, to commercialize GenAI-powered engagement solutions, including their future products or services. The partnership merges their innovative technologies to address the needs of underserved and vulnerable populations while helping clinicians advance value-based outcomes.

ZBH currently carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate implies a 7.3% year-over-year increase in the company’s 2024 earnings, backed by a 4.9% improvement in revenues. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

For GE HealthCare, investing in AI and machine learning is fundamental to make precision care a reality. The 125-year-old MedTech innovator topped the FDA’s list of AI-enabled medical devices for the consecutive third year, with 72 listed 510(k) clearances or authorizations to date in the United States. Recently, it unveiled innovations such as Revolution RT, an enhanced version of the Intelligent Radiation Therapy platform, which harness the power of AI to optimize the complex radiation therapy workflow.

The company is strengthening its ultrasound portfolio with new products featuring significant upgrades, platforming solutions and cutting-edge AI applications for radiology, urology and cardiology. Using NVIDIA technology, GE Healthcare developed the AI-driven SonoSAMTrack research model to segment anatomies, lesions and other key areas in ultrasound images. Additionally, the company enhanced its collaboration with Mass General Brigham this year by combining medical imaging foundation models with their AI research work.

GEHC currently carries a Zacks Rank #3. Going by the Zacks Consensus Estimate, the company is likely to achieve an 8.7% year-over-year increase in its 2024 earnings, driven by a 3% revenue improvement.

MedTech giant Medtronic integrates cutting-edge AI technologies into its research and design capabilities to foster innovation. From its robotic-assisted surgery platforms, colonoscopy and endoscopy systems to insulin pumps, AI already plays a crucial role. The company’s latest AI advancements for endoscopic care include the introduction of ColonPRO software for the GI Genius intelligent system, making a significant leap forward in AI-driven polyp detection.

Their expanded collaboration with Cosmo Pharmaceuticals proves to be a major leap in the field of AI-assisted healthcare, strengthening Medtronic’s footing. Of late, the UNiD Adaptive Spine Intelligence is becoming increasingly popular with customers. The company also broadened the Touch Surgery Performance Insights platform with 14 new AI-driven algorithms across surgical workflow, instrument and anatomy detection. These innovations expand the platform's capability to translate surgical videos into actionable insights post-procedure.

MDT currently carries a Zacks Rank #3. The Zacks Consensus Estimate suggests 4.6% year-over-year growth in the company’s fiscal 2025 earnings, driven by a 3.2% revenue increase.