Could Personalized Medicine Be Your Portfolio's Next Big Winner? Find Out

Personalized medicine, which involves tailoring treatment to a patient’s unique disease profile, is widely regarded as the holy grail of medicine. However, the current implementation of this approach faces significant hurdles.

Bank of America Securities (BofA) highlights that the precision medicine approach is currently cost, labor, and time-intensive.

Analysts Alec Stranahan and Michael Ryskin specifically point out that the substantial amount of manual work involved in processing complex biological data and making treatment decisions leads to considerable delays.

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Beyond the practical challenges, precision medicine also grapples with data validation issues. Given the infinitely complex nature of biology and the huge number of interactions between biological systems, researchers often run into issues with validating the impact of genes/pathways associated with disease progression/response to treatment.

Despite these inherent challenges, the integration of Artificial Intelligence (AI) and Machine Learning (ML) is widely recognized as a pivotal enabler for advancing precision medicine.

Consequently, a number of companies are actively leveraging these technologies to innovate within the precision medicine landscape, striving to make tailored treatments more accessible, efficient, and effective.

These companies include Tempus AI, Inc. TEM, Guardant Health, Inc. GH, Exact Sciences Corp. EXAS, NeoGenomics, Inc. NEO, Quest Diagnostics, Inc. DGX, and LabCorp Holdings Inc. LH, each employing AI in unique ways to enhance diagnostics, therapy selection, and overall patient care across the care continuum.

Tempus AI

BofA analyst says Tempus AI perfectly fits the theme of AI in precision medicine.

Like most MDx companies, Tempus AI has built its business off an industry-leading database of clinico-genomic data. Tempus leverages this data by training AI/ML algorithms to parse through the data and detect patterns and anomalies.

BofA reiterates a Neutral rating for Tempus AI, given its already premium valuation. The analyst remains constructive on the business and key markets. However, due to peer group expansion, BofA raised its price forecast from $68 to $70.

Guardant Health

Guardant Health was an early mover in the liquid biopsy cancer testing/therapy selection market with their Guardant 360 (G360) test.

Guardant Health has a clear goal to build upon its G360 test (therapy selection) and expand across the care continuum, thus allowing it to participate in a patient’s receiving precision medicine at all stages post-cancer diagnosis.

Guardant Health has its business built on the algorithms that it runs.

BofA maintains a Buy rating on Guardant Health, given its leading position, strong growth profile, and upcoming catalyst path for new products.

Exact Sciences

BofA analysts say Exact Sciences Corp. has expanded to offer services across the care continuum.

While Exact Sciences started screening for colorectal cancer specifically, their focus has been steered towards all indications and across the treatment paradigm.

Exact Sciences’ legacy Cologuard test / early detection doesn’t necessarily “fit” the precision medicine theme; however, everything Exact has done since is “precision medicine / AI-aligned,” BofA added in its investor note on Wednesday.

Given its strong financial profile and near-term catalyst path, the analyst maintains a Buy rating on Exact Sciences.

NeoGenomics

NeoGenomics has been known as a traditional reference lab offering many hotspot tests. However, by adding the PanTracer testing family and data services offering, NeoGenomics leverages the numerous hotspot data points and can build those into a more robust AI algorithm to inform the more modern therapy selection tests.

The dataset/algorithm and 500+ tests create a flywheel where the tests that are sold generate information. The information informs the algorithm, eventually leading to more accurate algorithms, which help market the tests… bring you back to more tests.

BofA maintains a Neutral rating on NeoGenomics given near-term headwinds and more limited upside versus its prior trajectory.

Quest Diagnostics

Quest Diagnostics is showing trends toward AI in precision medicine with Haystack and PathAI Quest.

While not traditionally considered a “leader” in AI/precision medicine, Quest Diagnostics has shown progress toward becoming a company to watch.

At DGX’s 2025 Investor Day, management discussed innovations in lab diagnostics, including the adoption of AI and automation. Given Quest Diagnostics’ strong, steady performance and lower exposure to macro/policy overhangs, the analyst maintains a Buy rating.

LabCorp

LabCorp Holdings Inc. LH aims to be a notable player in AI precision medicine. Although LabCorp is known as a traditional reference lab, with trends toward AI and precision medicine, LH has shown signs of jumping on the bandwagon.

While LabCorp already offers NGS tests, there appears to be a clear trend and focus towards advancing its AI/precision medicine portfolio.

BofA maintains a Buy rating on LabCorp, given strong and steady performance and lower exposure to macro/policy overhangs.

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