The artificial intelligence (AI) boom has taken the technology world by storm. However, this can benefit every sector and industry. 

The global pandemic revealed the importance of the rapidly evolving healthcare industry. Now, AI has the potential to transform this industry.

Medical device manufacturers Intuitive Surgical and Medtronic are two such growth stocks that can benefit from AI as it evolves. This year, these stocks have not grown as much as tech stocks. However, savvy and patient investors understand that it requires some time for growth stocks to reach their true value.

Intuitive Surgical (NASDAQ: ISRG)

In the minimally invasive surgery (MIS) market, Intuitive Surgical (NASDAQ: ISRG) is well-known for its cutting-edge da Vinci Surgical Systems. According to BIS research, it has an 80% market share and could maintain its monopoly until 2031.

The da Vinci surgical systems provide surgeons with a highly magnified 3D view of the surgical site. MIS also allows patients to recover faster. Between 2017 and 2021, the global increase in these procedures was 82%.

The company plans to incorporate AI into its already successful da Vinci systems, providing surgeons with greater precision. The global robotics market is expected to grow at a 16% CAGR to $18 billion by 2027.

Despite having a dominant position in the robotic surgery market, many competitors, including Medtronic, have developed their own robotic systems. Using AI technology to develop its systems will help the company protect and even increase its market share in this lucrative market.

Intuitive’s stock has gained 12%, year-to-date, compared to the S&P 500’s gain of 16%.

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Intuitive Surgical (NASDAQ: ISRG) YTD price performance. Source: Finbold.com

According to TipRanks, Intuitive Surgical is a “Strong Buy” with an average target price of $377.14, implying a 26% upside potential in the next 12 months.

Intuitive Surgical (NASDAQ: ISRG) stock price prediction. Source: TipRanks.com

Medtronic (NASDAQ: MDT)

Medtronic (NASDAQ: MDT) manufactures various medical devices under its cardiovascular, medical-surgical, neuroscience, and diabetes divisions. It is a growth stock as well as an income stock. It has a 46-year track record of consistently paying dividends.

Its’ consistent revenue and earnings growth enabled the company to return money to shareholders. Hugo, the company’s robotic surgery device, has now entered the market. Medtronic is also working to incorporate AI technologies into its various products to accelerate growth. 

Medtronic’s stock is up 6% year to date, thanks to another strong quarter with higher revenue and profits.

Medtronic (NASDAQ: MDT) stock price performance YTD. Source: Finbold.com

According to TipRanks, Medtronic is a “Moderate Buy” with an average target price of $94.80, implying a 14% upside potential in the next 12 months.

Medtronic (NASDAQ: MDT) price prediction. Source: TIpRanks.com

Key Takeaway

The healthcare industry is naturally defensive. Healthcare products will always be in demand, regardless of the economic situation, making these stocks very resilient. Medtronic and Intuitive are making rapid progress in the medical device and robotic surgery segments, aided by the AI boom, paving the way for a bright future. Investors should closely monitor these growth stocks.

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

The post Why the market is excited about these two growth stocks? appeared first on Finbold.

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Dennis is a business and financial writer, who had spent almost his entire life independently reporting on different business ventures with major impact on the US and global economy. Dennis places a special focus on examining tech stocks, biotech stocks all while investing a great part of his early hours to researching and writing on the companies in the US markets. Dennis has 15+ years of experience in financial markets.