AI in healthcare sits at the crossroads of powerful trends that matter for investors, from aging populations and rising treatment costs to central banks wrestling with inflation and bond yields. While higher yields and shifting policy expectations keep pressure on parts of the market, the Transformative AI Healthcare Stocks screener focuses on companies using AI to improve diagnostics, treatment decisions, hospital efficiency and remote care. These tools aim to cut waste, support clinicians and widen access to care. In this article you will see three of the most compelling stocks from that screener and why they stand out.

Butterfly Network (BFLY)

Overview: Butterfly Network is a medical technology company that builds handheld ultrasound devices like the Butterfly iQ+ and iQ3, which plug into a smartphone, tablet or hospital computer so clinicians can scan almost any part of the body at the bedside. It also offers AI powered software such as Compass AI and ScanLab, along with specialized tools for bladder scanning and veterinary use, aiming to make ultrasound more portable, connected and widely accessible.

Market Cap: US$2.18b

Investors looking at AI in healthcare may consider Butterfly Network because it combines chip based handheld ultrasound hardware with an expanding software layer in Compass AI and ScanLab that ties devices into hospital workflows and training. The company is still loss making and carries funding and governance risks, including reliance on external borrowing, a high P/S multiple and recent insider selling with executive pay under scrutiny. At the same time, recent updates describe momentum in embedded ultrasound partnerships, high gross margins and international expansion, alongside plans for a next generation probe and entry into the ultrasound cart market. That mix of growing commercial traction and unresolved profitability questions is what makes the deeper story worth examining more closely.

Butterfly Network’s handheld probes and AI tools may be gaining traction faster than the income statement suggests. Yet the real story sits in the detailed analysis report for Butterfly Network

Pfizer (PFE)

Overview: Pfizer is a global biopharmaceutical company that discovers, develops, manufactures, and sells prescription medicines and vaccines across fields like cardiovascular disease, oncology, rare diseases, inflammation, infectious disease, and COVID-19 treatment.

Operations: Pfizer generates the bulk of its revenue from its Global Biopharmaceuticals Business segment, which reported about US$61.9b in sales, with additional segment adjustments of roughly US$1.4b, and geographic exposure spread across the United States, developed markets, and emerging markets.

Market Cap: US$142.0b

Investors watching AI in healthcare may consider how Pfizer is pairing a large late stage pipeline in oncology, rare diseases, obesity and vaccines with AI powered R&D and a growing presence in emerging markets in an effort to reshape its earnings mix after the COVID peak. The company is integrating Seagen, signing new antibody and bispecific deals, and reporting positive data and approvals across cancer, hemophilia and autoimmune conditions. At the same time, it is contending with a patent cliff, pressure on revenue, a dividend that is not fully covered by earnings, and regulatory risk around drug pricing. The balance between a substantial pipeline and current earnings headwinds can make Pfizer’s risk reward profile within AI enabled healthcare an area of interest for investors with a longer time horizon.

Pfizer’s push to reshape earnings with AI powered R&D and a broad late stage pipeline could be masking a very different risk reward profile than headline revenue suggests. Get the full story in the 1 key reward and 4 important warning signs (3 are major!)

Medtronic (MDT)

Overview: Medtronic is a global medical device company that develops and sells products like cardiac pacemakers and defibrillators, neuromodulation implants, surgical tools, AI powered surgical video platforms, robotic assisted surgery systems, and diabetes management devices to hospitals and clinicians worldwide.

Operations: Medtronic generates most of its revenue from Cardiovascular at US$13.98b, Neuroscience at US$10.29b, and Medical Surgical at US$8.82b, with smaller contributions from Other at US$3.25b and unallocated adjustments of US$39m.

Market Cap: US$109.71b

Medtronic provides broad exposure to chronic disease treatment, AI guided surgery, robotics and neuromodulation, backed by an established history in devices and a 3.33% dividend that may appeal to income focused investors. The cardiovascular and neuroscience franchises are being refreshed through acquisitions such as SPR Therapeutics and CathWorks, AI based tools such as Touch Surgery Aide, and adoption in cardiac ablation. However, parts of the diabetes and Medical Surgical portfolio are under pressure, and recent recalls in neuromodulation products highlight execution risk. Some assessments describe the stock as trading below certain estimates of fair value. A key issue for investors is how the pipeline, restructuring initiatives and the planned Diabetes spin off could affect Medtronic’s earnings profile in the coming years.

Medtronic’s earnings story, pipeline and planned Diabetes spin off could be pulling in different directions, so the real question is what the market may be missing about its future cash generation in the analyst forecasts for Medtronic

The three stocks in this article are just a starting point, since the full Transformative AI Healthcare Stocks screener on Simply Wall St flags 38 more companies with equally compelling narratives through the Transformative Artificial intelligence (AI) Healthcare Stocks screener. Use Simply Wall St to identify and analyze the exact catalysts and storylines that matter to you, so you can focus on the AI healthcare stocks that best align with your highest conviction ideas.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.