Editor's note: “Google DeepMind CEO: 'This is the next $100 billion AI business'”“ It was previously published in May 2024. It has since been updated to include the most relevant information available.
AI stocks have been all the rage lately, and for good reason: We believe that as the underlying technology advances, artificial intelligence will truly transform the world over the next few years, which will lead to a surge in AI stocks and make small fortunes for forward-thinking investors.
But if you follow the mainstream media's lead, Stocks you shouldn't buy This is to prepare for this boom.
Much of the current AI buzz revolves around chipmakers such as: NVIDIA (NVDA) and software companies Microsoft (MSFT). These are the AI stocks that CNBC and Bloomberg are talking about. These are the stocks that are grabbing all the headlines and getting most of the investor attention…
However, these AI-related stocks do not have What the real industry experts, like the CEO of Google's AI business, DeepMind, are most excited about. And they Definitely not. As the AI boom continues, AI stocks are expected to see the most explosive growth.
Rather, that title belongs to a different type of AI stock, a subsector that represents a perfect storm of potential to generate extraordinary gains in a short period of time.
What I'm talking about is Biotechnology stocks.
Seriously, biotech stocks are soaring right now.
A small biotech company Corvus Pharmaceuticals (CRBP) is already up more than 685% this year, and the year is only half over. Janwan (Junks) increased by about 300%, Isle of Skye Bioscience (Sky) is up about 180% since the beginning of the year.
Some biotech stocks are soaring right now, and many are expected to continue to do so.
why? It's all thanks to the convergence of AI and biotechnology.
The Confluence of AI and Biotechnology: Unlocking Huge Economic Value
The application of AI in biology has the potential to bring enormous benefits.
And we're not alone in this belief: Google DeepMind CEO Demis Hassabis agrees. In fact, he recently said that applying AI to biotechnology could create “enormous economic value.”
What's driving this bullishness? Data.
After all, there is no shortage of quality data when it comes to the human body — in fact, there is more of it than anywhere else on Earth.
That's because, like computers, humans are really just chunks of data strung together.
In essence, a computer is a coded series of 1s and 0s, with each number corresponding to a specific action the computer must take. Similarly, humans are made up of a series of A, G, C, and T – the four base types found in the human DNA molecule – each of which determines a person's characteristics, traits, and even behaviors.
In that sense, data is the element that connects humans and computers.
This means that AI could have a particularly big impact on the human body.
Quality data delivers powerful results
Of course, after all, what is AI? AI is simply machine learning algorithms that use data analytics to learn how to perform specific tasks, so ultimately, the amount and quality of data an AI model has access to will determine the quality of the model itself.
And when it comes to the human body, there is no shortage of quality data.
Applying AI to all this data will change the world.
Think about it: it takes roughly $900 million and 13.5 years to develop a new effective drug.
The drug development process is expensive and time-consuming, so companies cannot afford to develop so many drugs, resulting in a significant shortage of drug candidates and programs when considering all combinations of human biological data.
But AI can significantly speed up this process and reduce costs.
We can map genetic data, identify mutations, and run simulations to find the right compounds to counter those mutations – all almost instantly.
Essentially, AI allows researchers to find potential new drugs much faster than they can today.
And this is already happening.
Last year, a major Japanese pharmaceutical company Takeda Pharmaceutical (tack) bought an experimental psoriasis treatment developed in just six months using AI for $4 billion.
You are not alone.
Other major pharmaceutical companies Bayer, Roche, Sanofi (Sunny) and AstraZeneca (Azun) is actively using AI technology for drug discovery purposes.
Nvidia is also getting into the game, partnering with an AI biotech startup to develop underlying models for AI-powered drug discovery and development.
The future of medicine starts now. And it's big business.
Final conclusions on AI in biotech
Research firm Deep Pharma Intelligence estimates that investment in AI-based drug discovery has tripled in the past four years to nearly $25 billion.
Morgan Stanley believes the technology could bring an additional 50 new therapies to market over the next decade, generating more than $50 billion in annual sales.
But even these estimates are conservative, according to DeepMind's CEO.
DeepMind is considered one of the leaders in AI-powered drug discovery. The company's foundational tool, AlphaFold, uses artificial intelligence to predict protein structures. The company has released a new version that can model a variety of molecular structures, including DNA and RNA, and predict their interactions. This is a big step towards scalable AI-powered drug discovery.
And DeepMind's CEO hopes to create a multi-billion dollar business from AlphaFold.
We think that's entirely possible.
Global pharmaceutical sales are worth more than $1.5 trillion annually.
We believe that AI-enabled drug discovery will revolutionize an entire industry, and from that perspective, AI-enabled drug discovery could one day become a trillion-dollar market.
The time to invest in this new hidden corner of the boom is now.
Our research shows that in addition to DeepMind, there are two other companies leading the AI biotech revolution.
These are world-class companies led by the best minds in the industry, with the best technology in the business, big opportunities with highly promising development pipelines, and perhaps most importantly, backed by the world's largest AI companies, Microsoft and Nvidia.
Trust me, these are two stocks you need to know about right now, and I'm confident they could each skyrocket over 1,000% over the next few years.
Learn all about these potential biotech giants.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
P.S. If you want to keep up with Luke's latest market analysis, read his Daily Notes. Innovation Investor or Early Stage Investors Subscriber site.
