In what represents a positive trend for investors engaged with ETFs such as the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM), the AI adoption conversation continues gaining importance and momentum.
That includes what sectors and industries make for credible long-term AI adopters. Healthcare has already earned a place in that conversation. However, the extent to which that sector can embrace AI in the years ahead is potentially massive. This indicates that the AI-related names held by QQQ and QQQM could be boosted by healthcare leaning into AI.
There are valid reasons why healthcare is already durably adopting artificial intelligence. Healthcare is a politically sensitive industry. It stirs heated emotions among both parties’ voters. However, there’s one thing all Americans can agree on: healthcare costs are too high. In addition, they’re rising too fast and need to come down now. AI can help.
Healthcare Spells Huge Opportunity for QQQ
Put simply, healthcare costs in the U.S. are out of control. If nothing is done about the situation, those costs could represent a quarter of this country’s GDP in 2050. AI, including in the forms purveyed by some QQQ/QQQM member firms, could improve that gloomy outlook.
“The application of AI in drug discovery, hospitals, value-based care and in other areas could create savings of $400 billion to $1.5 trillion,” notes Morgan Stanley.
Notably for QQQ/QQQM investors, the applications of the technology in the healthcare sector aren’t limited to a specific avenue. Rather, they’re broad.
As Morgan Stanley points out, artificial intelligence’s applications in new drug development could stoke savings of $100 billion to $600 billion over the next 25 years while AI-generated savings in hospitals could reach a staggering $900 billion during that period.
“AI can improve hospital efficiency by optimizing staffing and patient scheduling, and improving supply chains and drug management, to name a few examples. Hospital operators already are reporting savings in these areas, and more is clearly possible,” according to the bank. “AI-related cost savings of 10% to 20% should be achievable for hospitals, the single largest category in U.S. healthcare spending, for cost savings in 2050 in the range of $300 billion to $900 billion.”
Those are big numbers and figures that highlight longer-ranging opportunity with QQQ and QQQM. Importantly, there’s bipartisan support for reining in healthcare costs, indicating the Invesco ETFs face limited political risk on the road to broader healthcare artificial intelligence adoption.
For more news, information, and strategy, visit the ETF Education Content Hub.
A message from Advisor Perspectives and VettaFi: Are you backed by institutional quality bond funds? Click here to learn more.
