Nvidia, a dominant force in the artificial intelligence revolution, is looking to disrupt the health care industry in a big way. And the Mag 7 company could be just what the doctor ordered for the medical sector, which could give Nvidia stock a bigger boost.
Having taken the lead in powering large-scale AI systems, Nvidia is moving to expand the fast-growing technology's reach to health care innovations, including drug discovery and medical diagnostics.
"Some things that could not have been done previously, or would have taken very long, (with) Nvidia's technologies, you can do these things much quicker," Raj Joshi, who covers the tech industry at Moody's, told Investor's Business Daily.
Nvidia Stock: Eyeing Health Care Disruption
The tech behemoth has been working on modernizing the health care industry since 2018 with its computing platform, Clara. Nvidia's advancements have opened the door to new opportunities in the drug discovery process.
In 2023, Nvidia launched the BioNeMo platform, mobilizing generative AI to optimize this research and development.
Before AI, these innovations could take more than a decade, costing billions and often failing in clinical studies and trials.
AI Speeds Up Drug Discovery
With many drug discovery attempts "the failure rate is high," Moody's analyst Joshi said.
"Power technologies can reduce the rates of failure or eliminate the drug candidates that would not fit the ultimate criteria," he added. "I think it is helping the drug developers cut the cost, cut the time."
AiNews.com CMO Alicia Shapiro said Nvidia can employ AI to sort through trillions of pieces of data and to invent new molecules and proteins that will help discover fresh treatments for chronic health problems.
"With the genomics, they can even tailor it so that each individual person gets the treatment that will help their genes do a better job treating their disease," Shapiro said. "It's pretty cool."
Nvidia Stock: AI-Powered Medicine
Nvidia's technology has expanded steadily in the medical field.
The company is deploying AI to better understand and efficiently read medical images. Joshi cited labs that use AI for reading medical images or scans. "It is just speeding up the process," he said.
Nvidia is also working with medtech companies such as Johnson & Johnson to accelerate the mobilization of AI for surgery. GE Aerospace spinoff GE HealthCare has also utilized Nvidia AI technology for the tool, SonoSAMTrack to analyze ultrasounds with just two-to-six clicks of the program.
"Now they have Nvidia's AI databases and computing processes that can handle all that information. So they're going to be able to identify diseases quicker and more accurately than some of the doctors," Shapiro said.
For example, scientists at UC San Francisco made breakthroughs earlier in 2024 detecting Alzheimer's disease up to seven years before symptoms develop by analyzing patient records with AI.
In 2023, Nvidia worked with University of Florida researchers to create an AI program that generates doctors' notes. According to a study, it worked so well that physicians couldn't tell the difference between those written by doctors and the program.
Potential Challenges For AI And Health Care Industry
However, despite the capabilities of Nvidia's technology, challenges have emerged.
Joshi cited regulations. "You are going to see more regulations come up in all jurisdictions," he said. "You have to address data issues, data, privacy issues intellectual property issues, and ethical issues. How much can you rely on AI, and who's ultimately responsible?"
Shapiro also cited the limitations of AI itself.
"AI is still new for the general public, and we know AI can hallucinate and make mistakes and make up information," she said.
Competition In Health Care
And then there's competition.
Joshi cited Apple which "has actually publicly said they are very interested in health care."
"Google (and) Alphabet are very focused in this market," he said. "Alphabet itself is a big player in the artificial intelligence and genitive artificial intelligence market. I expect a lot of competitors to emerge."
The challengers include smaller players.
Take Tempus AI which recently went public. The precision medicine company recently released an AI-enabled test to evaluate biomarkers from DNA and RNA. This could help determine certain cancer patients who would or would not respond to immunotherapy.
Nvidia Stock: Of Profits And Democratizing AI
Shapiro said Nvidia "wants to democratize AI and high-performance computing technologies so breakthroughs can be made by health care practitioners and researchers."
"It kind of seems like an altruistic cause," she said. "They just really want to be able to help and improve patient outcomes and be able to advance medicine."
Further, AI has turned Nvidia into a tech powerhouse. The chipmaker is in a strong position to ride a major trend, especially in health care.
Shapiro said AI-enabled health care is expected to be between $740 billion to $1 trillion in market value by 2030.
"It's amazing just how much money is out there that's spending and investing in AI for health care," Shapiro said. In 2023 alone, the U.S. spent about $4.7 trillion in health care, roughly 18% of the country's total economic output, she said.
A Huge Industry
"The industry is a huge industry as it is, and it's just going to get bigger," Shapiro said.
And competition is heating up. Recently, Nvidia told Microsoft (MSFT) that its next-generation Blackwell artificial intelligence chips will be delayed because of a design issue, according to The Information.
"Overall in the technology market, health care is often one of the largest industry verticals that consumes technology," Joshi said.
But he expects health care "to be one of those areas where it takes longer ... unlike the chatbots and other things that have been created by very large tech companies," he added.
Nvidia Stock: Long Overdue Innovation
Still, Joshi feels the medical industry is long overdue for an injection of advancement. A dose of Nvidia and AI may just be the cure, he argues.
"The health care industry is perhaps behind," he said. "Things like patient management, you know, patient engagement. Things like administrative activities that the health care professionals spend their time on. So to the extent that these technologies can improve, it's certainly good for all of us."
