Over the past several months, generative AI (GenAI) in the medical devices industry has moved from experimental to operational use. Applications include generating synthetic medical images, simulating disease progression, creating potential drug molecules and simulating their effects, to accelerate the long and costly drug development process.
Grand View Research estimates the global AI in the healthcare market to witness a CAGR of 38.9% from 2026 to 2033, building on a $36.67 billion valuation in 2025. Despite these positives, a few medical device giants that extensively use AI tools lagged in the first half of 2026. Their stock prices have provided negative returns during this time.
However, strong business models of these companies and their current favorable Zacks Rank indicate northward journey of stock prices in the second half. Three such companies are: Intuitive Surgical Inc. ISRG, IDEXX Laboratories Inc. IDXX and Alcon Inc. ALC. Each of our picks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The chart below shows the price performance of our three picks year to date.
Image Source: Zacks Investment Research
Intuitive Surgical Inc.
Intuitive Surgical is increasingly embedding AI and digital tools into its robotic ecosystem. ISRG operates in the robotic surgery market for soft tissue procedures, where adoption is supported by the shift toward minimally invasive care. The company’s platforms include the da Vinci surgical system and the Ion endoluminal system.
ISRG continues to add digital capabilities that can improve training, workflow and program management for hospitals. These efforts include software and analytics that connect systems, instruments and services and can deepen customer engagement over time.
In the first quarter of 2026, ISRG highlighted expanded adoption of its da Vinci, Ion and digital platforms, supporting continued investment in the connected ecosystem. Over time, digital features can differentiate the installed base and support incremental service and software revenues as hospitals focus on standardizing surgical programs.
Intuitive Surgical has an expected revenue and earnings growth rate of 16.5% and 16.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.1% over the last 30 days.
IDEXX Laboratories Inc.
IDEXX Laboratories’ robust strategic execution is highlighted by new business gains, high customer retention levels and solid net price realization. Continued momentum in CAG Diagnostics’ recurring revenues is supported by improved net price realization.
IDXX is also advancing its innovation-driven growth strategy, including high-impact menu additions to the Catalyst platform. International expansion remains an attractive opportunity for IDEXX as it continues investing in its commercial footprint in regions where customer readiness and growth potential are strongest.
IDXX’s software solutions are further supporting growth by improving clinic workflows and encouraging greater utilization of diagnostics. Lower debt levels on the balance sheet are also encouraging.
IDEXX Laboratories has an expected revenue and earnings growth rate of 9.6% and 12.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 60 days.
Alcon Inc.
Alcon is seeing uptake from new launches across both franchises, with Unity supporting equipment momentum and PanOptix Pro and TruPlus strengthening its IOL lineup. ALC’s Vision Care growth is being led by dry eye, as Tryptyr expands payer coverage and Systane continues to gain share. Newer reusable lenses are helping offset declines in legacy products.
ALC’s growth strategy remains tied to a steady cadence of launches that can expand addressable procedures and support price and mix across both segments. Unity VCS and Unity CS are at the center of the current equipment cycle.
ALC highlighted continued momentum in the first quarter of 2026 as installations expand and surgeon feedback emphasizes workflow integration. Unity VCS was also named an Edison Award winner in 2026, which provides external validation for the platform.
Alcon has an expected revenue and earnings growth rate of 7.3% and 14%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.9% over the last 90 days.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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This article originally published on Zacks Investment Research (zacks.com).