The AI Trade Just Moved Into Your Bloodstream, and 4 Healthcare Stocks Are Winning

Key Points

• AI investment is shifting from chips and software toward human biology, driving record highs in healthcare and biotech stocks like the Nasdaq Biotechnology Index.
• TradeSmith CEO Keith Kaplan frames the trend as biointelligence, grouping companies by how they read, rewrite or replace human biology using AI.
• Guardant Health, Illumina, Eli Lilly and Moderna illustrate the theme, with data-driven platforms that compound value seen as stronger bets than single-drug biotech gambles.

Rate and energy headlines have kept the broad market jumpy, yet one sector keeps finding buyers. Healthcare has led on days when the S&P 500 slipped, and the Nasdaq Biotechnology Index has pushed to record highs.

The money isn’t chasing one drug. It’s following a shift in where artificial intelligence (AI) is pointed. Chips, code and business data defined the first waves of the AI trade. The next target is the human body, a data set with 8 billion members.

That shift puts some of medicine’s biggest challenges—cancer, heart disease, dementia and aging—squarely in focus. These conditions affect billions of lives, and AI is giving researchers new ways to understand their underlying biology, turning once-daunting medical mysteries into problems that can increasingly be modeled, tested and addressed with greater precision.

AI Is Turning the Medical Race Into an Engineering Race

The framework comes from Keith Kaplan, CEO of TradeSmith, who calls this wave biointelligence. Earlier AI waves read chips, code and business data. This one reads people, a market that never runs out of customers.

Wall Street has started pricing that in. Eli Lilly and Company NYSE: LLY briefly touched a $1 trillion valuation last November, a first for a healthcare company. In August, Moderna NASDAQ: MRNA and partner Merck & Co. NYSE: MRK reported that their personalized cancer vaccine met its primary and key secondary endpoints in a Phase 3 melanoma trial, the first late-stage win ever for an mRNA cancer therapy.

Two trends collided to make that possible. Sequencing a human genome fell from about $100 million in 2001 to a few hundred dollars, and AI became exceptionally good at finding patterns in oceans of data. Kaplan splits the opportunity into three moves: read the body, rewrite it, and replace what can’t be saved.

Reading, Rewriting and Replacing the Body Have Reached the Clinic

Reading already has a face. Ann Johnson lost her speech to a brainstem stroke at 30. Eighteen years later, a UC San Francisco team used AI to decode her brain signals into speech, placing 253 electrodes on the surface of her brain and translating her attempts to speak into words at about 80 per minute, against 14 on her previous device. The electrodes weren’t new—the AI that could interpret them was.

Rewriting looks like Moderna’s personalized cancer vaccine, which uses AI to analyze mutations in a melanoma patient’s tumor and identify up to 34 targets for the patient’s immune system to attack. Replacing is further out, with gene-edited pig organs aimed at a transplant list of roughly 100,000 Americans.

Platforms That Compound Beat Biotech Lottery Tickets

Here’s where it gets frustrating for investors. The purest brain-interface plays, including Neuralink, Synchron and Paradromics, are private, and the closest public door is Medtronic NYSE: MDT.

That pushes the public trade toward data, platforms and distribution. The old biotech model was pick the right molecule or lose everything. Now every test Guardant Health NASDAQ: GH runs sharpens the next, and every patient in the Tempus AI NASDAQ: TEM library improves the next answer. These businesses compound.

In Kaplan’s framing, the group is a decade-long menu, not a checklist. Start with profitable large caps and toll-booth names, size speculative positions small and expect biotech-style swings. He sorts 12 biointelligence stocks into four risk groups in a free report, which is where the four names below come from.

Blood Tests and Sequencers Get Paid on Every Breakthrough

Guardant Health’s Shield test screens for colorectal cancer, the second-deadliest cancer in the United States, from an ordinary blood draw. About a third of eligible adults skip screening rather than face a colonoscopy, and a blood test changes that math.

Adoption is moving fast. Second-quarter screening revenue reached $52.9 million against $14.8 million a year earlier, on roughly 66,000 Shield tests versus 16,000. The test has entered American Cancer Society guidelines, UnitedHealth Group NYSE: UNH now covers it, and about 70 million lives have access to it.

Kaplan expects a strong report in late October, since early detection costs insurers far less than late-stage treatment.

Illumina NASDAQ: ILMN sells the shovels in this gold rush. It builds the sequencers behind collapsing genome costs, then sells the reagent kits those machines consume for years.

Three lost years on a botched acquisition are behind it; guidance moved up to a range of $4.60 billion to $4.64 billion, and the stock rejoined the S&P 500 in September. Kaplan’s view is that Illumina benefits from every trial that starts with a sequence, which makes sequencing volume the number to watch.

Pharma Scale and a Cash-Burning Cancer Bet Set the Risk Range

Eli Lilly anchors the steadier end. Revenue hit $65 billion last year, up 45%, and guidance calls for $85 billion to $87 billion this year. Beyond Mounjaro, an oral GLP-1 pill won approval in April, and retatrutide, an experimental triple agonist, delivered average weight loss of 71 pounds in Phase 3, with a filing targeted for early 2027.

The bigger story may sit outside weight loss. Lilly runs 42 Phase 3 programs, with about three-quarters of its new medicines outside GLP-1s, and committed up to $2.75 billion in March for exclusive rights to an AI drug discovery platform.

Moderna sits at the other extreme. Nine trials with Merck span melanoma, lung, bladder, and kidney cancer, and the AI that picks targets for each patient is the product. The catch is a quarterly loss of roughly $800 million.

Nasdaq-100 inclusion took effect in October, which forces index-tracking funds to buy, and full Phase 3 data is expected later this month with earnings right behind it.

Waiting until after earnings may be sensible, per Kaplan, who sizes the stock as speculative.

Data Engines, Not Single Molecules, Connect This Biotech Basket

Pull the thread through all four, and the link is information. Guardant Health reads it from blood, Illumina sequences it, Eli Lilly turns it into medicines at a global scale, and Moderna rewrites it into personalized vaccines. Each gets sharper as data piles up, which separates this group from old binary bets on a single trial.

The upside is a decade of compounding across testing, tools and therapy. The risk is valuation after big runs, Moderna’s losses and the volatility that has always shadowed biotech, and none of it pays off without adoption by insurers, regulators and labs.

Stay focused on adoption and data volume, because that’s what moves biointelligence stocks from science headlines into earnings.