Artificial intelligence (AI) will have a profound impact on the medical industry, where it could help accelerate drug discovery and patient treatment, creating big opportunities for these top AI stocks to invest in.
At the moment, new drug development has a ridiculous fail rate of 90%, according to the National Institutes of Health. Worse, according to Science Direct, “Drug discovery and development is a long, costly and high-risk process that takes over 10-15 years with an average cost of over $1–2 billion for each new drug to be approved for clinical use.”
However, with AI, the failure rate could drop, and the design of new drugs could become far easier. As noted by InvestorPlace contributor Luke Lango: “Research firm Deep Pharma Intelligence estimates that investments in the field of AI-powered drug discovery have tripled over the past four years to nearly $25 billion. Morgan Stanley believes that AI-powered drug discovery will lead to an additional 50 novel therapies being brought to market over the next decade, with annual sales in excess of $50 billion!”
In short, AI could transform drug discovery and actually get us closer to treating issues we never thought were solvable. That said, here are three top stocks to consider.
Top AI Stocks to Invest In: Lantern Pharma Inc. (LTRN)
I last spoke about Lantern Pharma (NASDAQ:LTRN) on August 1, when it traded at $4.89. It has taken a small dip in the past week and still has a good deal of upside potential. As I noted then, “With the help of machine learning, AI, and advanced genomics, its platform can scan billions of data points. All of this is in an effort to help identify compounds that could help cancer patients.”
Even more impressive, its AI platform RADR helped it create LP-184 for solid tumors and just received FDA clearance for Phase 1 trials. We’ll get more information on what’s happening with the company when it posts second-quarter earnings on August 9 after the bell.
Recursion Pharmaceuticals (RXRX)
Recursion Pharmaceuticals (NASDAQ:RXRX) recently gapped higher after receiving a $50 million investment from AI powerhouse Nvidia (NASDAQ:NVDA). With that, Recursion will use NVDA technology to help create AI models and software to discover new drugs. Even better, it may help with the five human trials Recursion is conducting, including a mid-stage trial to treat cerebral cavernous malformations.
The company is also working on treatments for neurofibromatosis, familial adenomatous polyposis, mutant cancers, ovarian cancers and cancer immunotherapy. Better yet, not only does Nvidia like the company, but so do analysts. KeyBanc, for example, just raised its price target on the stock to $15 from $12. Even Cathie Wood’s ARK Investment just bought 212,200 shares of RXRX stock.
AbCellera Biologics (ABCL)
Or, look at AbCellera Biologics (NASDAQ:ABCL), which uses AI to speed up the discovery of antibodies for their use in new drug development. In fact, according to Motley Fool contributor Keith Speights, “The company’s goal is to be two times faster at advancing antibody therapies into the clinic than its rivals.”
Even better, the company has a network of big partnerships. For example, it’s already working with AbbVie (NYSE:ABBV) to discover new antibodies.
“The partnership will leverage AbCellera’s antibody discovery and development engine to deliver optimized development candidates for up to five targets selected by AbbVie across multiple indications,” according to a 2022 press release. It’s also working with Regeneron Pharmaceuticals (NASDAQ:REGN) to target an undisclosed G-protein coupled receptor.
Even more, deals should bring in even more revenue for the company. In fact, royalty revenues should grow substantially over the long term as milestones are met.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.