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Hello, Reader.
In 1979, General Electric (GE) 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.
Nearly five years into the mission, Culp cannot yet claim victory. But GE’s revenues are on the rise, and more importantly, its annual net income just reached a six-year high.
To spearhead GE’s turnaround, Culp proposed a major restructuring two years 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 last January when GE spun out its healthcare operations as GE HealthCare Technologies Inc. (GEHC).
The Old Becomes New
GE HealthCare is interesting – both for what it is already and what it could become.
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.
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 new paradigm with gusto.
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.
During the first quarter of the year, all four divisions produced double-digit revenue growth (on a constant currency basis) and are on track to deliver high single-digit growth for many years to come.
The company is a leader in the field of AI-enabled medical devices. Of the more than 500 devices included by the U.S. Food and Drug Administration on a recently updated list of AI-enabled device authorizations, 42 are from GE HealthCare. That achievement places the company on the top of the heap. Siemens Healthineers is No. 2 on the list with 29.
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.
How to Benefit from the AI Disruption
Elon Musk has called AI: “The most disruptive force in history.”
While we usually think of a disruption as something negative, that is not always the case. It’s clear that GE HealthCare is using AI to disrupt the healthcare industry – for the better.
That’s because the whole purpose of AI is to create an intelligence that exceeds our own…
Therefore, it’s impossible for humans to truly fathom what an AI-driven future will bring, both within and outside the healthcare industry.
But I can tell you this…
In the very near future, our world will look radically different than it does today; and it’s time to start reckoning with that future.
That’s why I’m issuing this AI Code Red today. It’s the most urgent warning of my entire 30-year career.
Regards,
Eric
