The artificial intelligence (AI) investment boom has so far rewarded companies producing semiconductors, computing infrastructure and other technologies powering the rapid expansion of AI. However, the next wave of market gains could increasingly shift towards industries adopting the technology, with healthcare emerging as a potentially significant beneficiary.
An analysis by BlackRock’s Fundamental Equities quantitative team, drawing on more than 1,000 public company earnings reports, suggests that a growing share of companies across US market sectors are beginning to report measurable financial benefits from AI adoption.
Although the transformation remains at an early stage, the findings indicate that AI is gradually moving beyond infrastructure investment towards practical business applications. Even within the technology sector, only 30% of companies report that AI has improved their bottom line.
Stay ahead of the geopolitical week.
MD Briefing delivers expert analysis across five global fronts — the Indo-Pacific, energy, geoeconomics, European security, and the Middle East — every Monday morning. Free.
Healthcare is particularly well positioned to benefit because of its extensive proprietary data, expensive research and development processes, and the potential economic gains from accelerating drug discovery and development.
Healthcare’s data advantage could transform drug development
One of healthcare’s biggest advantages in the AI race is the enormous volume of proprietary information accumulated through decades of medical research and pharmaceutical development.
Around 90% of drugs entering development never receive approval for use, leaving pharmaceutical companies with extensive datasets from unsuccessful research programmes and clinical trials. Some companies possess more than a century of historical data that could help train AI systems and improve future research.
This information could become a major competitive advantage if AI enables researchers to identify patterns in failed experiments, improve molecular design and identify promising drug targets more efficiently.
Developing a new medicine currently takes approximately 10 years and costs around $2 billion. AI could reduce both the time and expense involved by supporting different stages of the process, from early-stage research and genomic analysis to clinical testing and regulatory documentation.
Faster development could also improve pharmaceutical companies’ financial performance. Because medicines have limited commercial lifespans and patent protection periods, bringing products to market earlier can generate revenue sooner, extend their effective commercial window and reduce the capital tied up in research.
Ageing populations provide another growth driver
AI’s potential contribution comes alongside healthcare’s established demand advantages.
Healthcare spending is generally more resilient to economic downturns than spending in many other industries because medical treatment remains necessary regardless of broader economic conditions.
Demographic changes provide an additional source of long-term growth. According to the United Nations, people aged 65 and older are expected to outnumber children under 18 globally by 2080, reflecting the increasing healthcare requirements of ageing populations.
These structural factors have traditionally supported higher valuations for healthcare companies compared with the broader equity market.
However, the sector has recently traded at a discount after investment returns were dominated by companies benefiting directly from the expansion of AI infrastructure.
The possibility of AI-driven productivity improvements could help healthcare recover some of that valuation premium. Nevertheless, the transition may take time because medical research and healthcare delivery operate under extensive regulatory requirements.
Investors are returning to healthcare stocks
Signs of renewed investor interest are already emerging.
BlackRock data shows that monthly investment flows into healthcare exchange-traded products became consistently positive towards the end of 2025, following approximately two years of outflows.
More than $17 billion was withdrawn from these products between January 2023 and August 2025. Since then, approximately $25 billion has flowed back into the sector.
Healthcare has also maintained its appeal as a defensive investment during periods of weakness in AI-related stocks. BlackRock’s analysis of US market performance since ChatGPT’s launch in 2022 found that healthcare stocks have typically outperformed on days when AI-related shares declined.
This suggests healthcare could offer investors exposure to a potential new source of technological growth while providing some protection against volatility in more heavily AI-dependent segments of the market.
AI could widen the gap between healthcare winners and losers
Despite the sector’s opportunities, the financial benefits of AI are unlikely to be distributed equally among healthcare companies.
FactSet data for the Russell 3000 Healthcare Index shows a 122% performance gap between the sector’s strongest and weakest stocks between 2005 and 2025. This compares with a 67% gap across the broader Russell 3000 Index.
The difference highlights the importance of company-specific capabilities in determining investment performance. Pharmaceutical firms with extensive proprietary datasets, established research infrastructure and the financial resources to integrate AI into their operations may be better positioned than competitors with fewer technological advantages.
Regulatory challenges, implementation costs and the difficulty of translating AI-generated research into approved treatments could also limit the benefits for some companies.
Ultimately, healthcare’s potential emergence as the next major AI investment beneficiary will depend on whether companies can convert technological improvements into measurable productivity gains and stronger earnings.
The first phase of the AI boom rewarded those building the technology. The next phase could increasingly reward industries capable of using it to transform established business models. Healthcare may be among the most promising candidates, although identifying companies that can successfully translate AI adoption into commercial results will remain central to investment decisions.
With information from Reuters.
