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Stryker (SYK) to Acquire care.ai to Boost AI-Driven Healthcare
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Stryker Corporation (SYK - Free Report) has entered into a definitive agreement to acquire care.ai, a privately held company specializing in artificial intelligence (AI)-assisted virtual care workflows, smart room technology and ambient intelligence solutions. This acquisition will bolster Stryker’s healthcare IT and wirelessly connected medical device portfolio, reinforcing its commitment to providing cutting-edge solutions that address critical challenges in the healthcare sector, such as nursing shortages and staff retention issues.
Stryker is continuing its M&A momentum, following the CEO's promise of a "very active deal pipeline" for the second half of 2024. The acquisition of care.ai will bolster Stryker's health IT offerings and expand its portfolio of wirelessly connected medical devices, further enhancing its position in the healthcare technology sector.
Significance of the Agreement
The acquisition of care.ai is significant for Stryker as it addresses critical challenges faced by its customers, including nursing shortages, staff retention issues, and workplace safety concerns. care.ai's AI-assisted platform enhances healthcare by enabling responsive, personalized workflows, allowing caregivers to spend more time with patients.
This acquisition will accelerate Stryker's healthcare IT and digital vision, providing customers with real-time, smart, and connected decision-making tools that improve the lives of both caregivers and patients. By integrating care.ai’s advanced AI-driven technology with Stryker’s existing Vocera platform and devices, the company will create a comprehensive, enterprise-wide ecosystem that supports dynamic clinical workflows and the development of smart care facilities. The deal underscores Stryker’s dedication to addressing the pressing needs of its customers and advancing the future of healthcare.
Stryker's acquisition of care.ai is part of its ongoing strategy of tuck-in acquisitions. In June, Stryker agreed to buy Artelon, a company specializing in soft tissue repair technology, and in December, it announced a deal to acquire joint replacement firm Serf Sas.
Industry Prospects
Per a report in Precedence Research, the global AI healthcare market size is expected to be worth $26.69 billion in 2024. It is anticipated to reach $613.81 billion by 2034 at a CAGR of 36.8%.
The robust growth will be primarily driven by the increasing adoption of digital technologies to reduce healthcare costs and enhance patient care quality. The rising prevalence of chronic diseases and an aging population are expanding the patient pool, leading to a greater need for efficient data management. The demand for personalized medicine and the need to maintain digital health records are further propelling the market. The integration of AI and machine learning into healthcare systems will aid in early disease detection and improved care, supported by data analytics, deep learning, natural language processing and predictive analytics.
Price Performance
Shares of Stryker have increased 8.6% so far this year compared with a 5.5% rise of the industry. The S&P 500 has witnessed a 12.3% rise in the same time frame.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Currently, Stryker carries a Zacks Rank #3 (Hold).
Some top-ranked stocks in the broader medical space are Universal Health Service (UHS - Free Report) , Quest Diagnostics (DGX - Free Report) , and ABM Industries (ABM - Free Report) . While Universal Health Service sports a Zacks Rank #1 (Strong Buy), Quest Diagnostics and ABM Industries carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Universal Health Services has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 14.58%.
Universal Health Service has gained 41.1% compared with the industry's 34.8% rise so far this year.
Quest Diagnostics has an estimated long-term growth rate of 6.20%. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.31%.
Quest Diagnostics shares have gained 3.7% so far this year compared with the industry’s 10.2% rise.
ABM Industries’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.34%.
ABM's shares have risen 24.1% so far this year compared with the industry’s 11.9% increase
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Stryker (SYK) to Acquire care.ai to Boost AI-Driven Healthcare
Stryker Corporation (SYK - Free Report) has entered into a definitive agreement to acquire care.ai, a privately held company specializing in artificial intelligence (AI)-assisted virtual care workflows, smart room technology and ambient intelligence solutions. This acquisition will bolster Stryker’s healthcare IT and wirelessly connected medical device portfolio, reinforcing its commitment to providing cutting-edge solutions that address critical challenges in the healthcare sector, such as nursing shortages and staff retention issues.
Stryker is continuing its M&A momentum, following the CEO's promise of a "very active deal pipeline" for the second half of 2024. The acquisition of care.ai will bolster Stryker's health IT offerings and expand its portfolio of wirelessly connected medical devices, further enhancing its position in the healthcare technology sector.
Significance of the Agreement
The acquisition of care.ai is significant for Stryker as it addresses critical challenges faced by its customers, including nursing shortages, staff retention issues, and workplace safety concerns. care.ai's AI-assisted platform enhances healthcare by enabling responsive, personalized workflows, allowing caregivers to spend more time with patients.
This acquisition will accelerate Stryker's healthcare IT and digital vision, providing customers with real-time, smart, and connected decision-making tools that improve the lives of both caregivers and patients. By integrating care.ai’s advanced AI-driven technology with Stryker’s existing Vocera platform and devices, the company will create a comprehensive, enterprise-wide ecosystem that supports dynamic clinical workflows and the development of smart care facilities. The deal underscores Stryker’s dedication to addressing the pressing needs of its customers and advancing the future of healthcare.
Stryker's acquisition of care.ai is part of its ongoing strategy of tuck-in acquisitions. In June, Stryker agreed to buy Artelon, a company specializing in soft tissue repair technology, and in December, it announced a deal to acquire joint replacement firm Serf Sas.
Industry Prospects
Per a report in Precedence Research, the global AI healthcare market size is expected to be worth $26.69 billion in 2024. It is anticipated to reach $613.81 billion by 2034 at a CAGR of 36.8%.
The robust growth will be primarily driven by the increasing adoption of digital technologies to reduce healthcare costs and enhance patient care quality. The rising prevalence of chronic diseases and an aging population are expanding the patient pool, leading to a greater need for efficient data management. The demand for personalized medicine and the need to maintain digital health records are further propelling the market. The integration of AI and machine learning into healthcare systems will aid in early disease detection and improved care, supported by data analytics, deep learning, natural language processing and predictive analytics.
Price Performance
Shares of Stryker have increased 8.6% so far this year compared with a 5.5% rise of the industry. The S&P 500 has witnessed a 12.3% rise in the same time frame.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Currently, Stryker carries a Zacks Rank #3 (Hold).
Some top-ranked stocks in the broader medical space are Universal Health Service (UHS - Free Report) , Quest Diagnostics (DGX - Free Report) , and ABM Industries (ABM - Free Report) . While Universal Health Service sports a Zacks Rank #1 (Strong Buy), Quest Diagnostics and ABM Industries carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Universal Health Services has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 14.58%.
Universal Health Service has gained 41.1% compared with the industry's 34.8% rise so far this year.
Quest Diagnostics has an estimated long-term growth rate of 6.20%. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.31%.
Quest Diagnostics shares have gained 3.7% so far this year compared with the industry’s 10.2% rise.
ABM Industries’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.34%.
ABM's shares have risen 24.1% so far this year compared with the industry’s 11.9% increase