After decades of hardware dominance, this company is building a new future powered by software, cloud, and AI.
Hello, Reader.
In 1979, General Electric introduced its famous tagline, “We bring good things to life.”
One of the things this iconic American company brought to life was its stock price, which soared more than 10,000% from the end of 1979 to its peak in 2000.
But shortly after that peak, the lights started flickering at GE, and its share price slumped for nearly two decades. Between 2000 and 2018, GE stock produced an abysmal 80% loss – leading to its ignominious eviction from the Dow Jones Industrial Average.
Enter Larry Culp, who became CEO in October 2018. The widely respected and heavily compensated CEO accepted the daunting task of reversing GE’s long-term decline.
To spearhead GE’s turnaround, Culp proposed a major restructuring in 2021 ago that would split the company into three distinct entities – each of which would become standalone publicly traded companies.
That action plan took its first of three giant steps forward when GE spun out its healthcare operations as GE HealthCare Technologies Inc. (GEHC) in 2023.
Since then, GE HealthCare has brought its own good things to life: AI Healthcare.
The company is deeply involved in AI-healthcare, especially in imaging and diagnostics. And this week, it announced that it is teaming up with two large U.S. health systems to develop cloud-first Software-as-a-Service (SaaS) platforms.
Now, GE Healthcare is a company that I consider to be a “Forever Stock.” And in today’s Smart Money, I’ll share why… detail the company’s latest news… and share the best way to stay up-to-date on all things AI Healthcare.
Let’s dive in…
From AI-Enabled Medical Devices…
As one of the oldest “new” healthcare stocks in the market, GE Healthcare is a blue-chip company with a formidable presence in the medical imaging industry.
The company operates in more than 160 countries. It sells medical equipment like CT scans, MRIs, X-rays, and ultrasound machines. It also sells service contracts on those machines.
GE HealthCare’s installed base of four million medical machines and devices serves more than one billion patients per year. The company conducts its operations through four main business divisions…
- Imaging…
- Ultrasound…
- Patient Care Solutions…
- And Pharmaceutical Diagnostics.
The company is a leader in the field of AI-enabled medical devices. Of the more 1,200 devices included by the U.S. Food and Drug Administration on a recently updated list of AI-enabled device authorizations, 100 are from GE HealthCare.
From an investment perspective, therefore, GE HealthCare is a two-part story. It is a solid, steadily growing medical imaging company that also includes considerable fast-growth potential from its AI product line and investments.
According to Grand View Research, artificial intelligence will become a key driver of medical device innovation over the coming decade. It explains…
Artificial intelligence and machine learning algorithms are being widely adopted and integrated into healthcare systems to accurately predict diseases in their early stage based on historical health datasets…
Healthcare functions such as diagnostics, patient management, medication management, claims management, workflow management, integration of machines, and cybersecurity saw a remarkable surge in the integration of AI/ML technologies.
Importantly, GEHC’s AI solutions do not replace medical professionals; they assist them. The company’s AI-enabled devices and services operate alongside traditional medical practitioners to support and optimize their efforts.
As Vignesh Shetty, a Senior Vice President at GE Healthcare, explains…
GE Healthcare’s digital strategy is to look at AI to help clinicians achieve clinical and operational outcomes that create maximum impact for patients, providers, and health systems… AI is an incredible lever to tackle problems at a speed and scale that our providers are coming to expect, to help save lives and improve outcomes for millions of patients everywhere.
GEHC is embracing this paradigm with gusto. And now, it is now expanding on it…
To AI-Powered Hospital Solutions
The healthcare company announced on Monday that it is teaming up with The Queen’s Health Systems in Honolulu and Duke Health in Durham to co-develop a new AI-driven hospital operations software solution.
The software will build on GEHC’s existing “Command Center” hospital-operations product, which supports nearly 500 hospitals and 55,000 beds globally. It is the company’s current AI-driven software that aggregates operational data (like beds, staffing, patient flow, transfers, equipment) and uses AI to help manage capacity and flow across the hospital.
In the partnership, Queen’s and Duke will contribute front-line knowledge likeworkflow, operations data, clinical insights to help shape the product so it reflects real hospital needs.
This collaboration shows that GEHC is no longer providing just diagnostic and monitoring hardware, but analytics and operations insights. This move could shift the company from a hardware-centric one to a broader software provider in AI healthcare.
Not only do SaaS packages generate ongoing subscription income, but GEHC’s new AI-driven software solution could transform hospital operations, improve patient care, and allow GEHC to build long-term customer relationships.
As I mentioned, GE Healthcare is a company that I consider to be a “Forever Stock” – the kind of stock you hold through thick and thin, unless the rationale for owning them changes significantly – especially as the AI Healthcare trend continues to grow.
It’s a trend that I’ve been following in Fry’s Investment Report for a while now, and I continue to keep an eye out for the next generation of AI healthcare winners, like GE Healthcare.
To learn how to access all of my AI Healthcare recommendations and research, click here.
Regards,
Eric Fry
