Beyond Tempus AI: 2 Health IT Stocks Poised for Growth in 2025

Healthcare IT spending is increasing each day, with Bain & Company’s survey claiming that 75% of healthcare providers are rapidly boosting their investment in artificial intelligence (AI), cybersecurity and other IT areas. What initially began as a temporary response during the pandemic has now transformed into a defining characteristic of next-generation healthcare, fueled by the rapid integration of generative AI technologies.

With spending in this sector projected to witness a CAGR of 15.4% from 2024 to 2031, healthcare IT has emerged as a highly attractive investment opportunity for stock market players.

Global IT Spending in Healthcare

Among other modalities, the convergence of AI and healthcare has taken a major leap forward in 2025. Venture capitalists and institutional investors are shifting capital into health tech with a laser focus on platforms that combine clinical data, imaging, genomics, and real-world evidence.

One of the most talked-about beneficiaries of this trend is Tempus AI TEM, with its stock up 30% year to date. While revolutionizing precision oncology and personalized care through its proprietary AI-based platform, the company is integrating multi-modal data (genomics, pathology, radiology and EMRs) to guide clinical decisions. In 2025, following its significant investment in Deep 6 AI and new partnerships with a number of health systems, Tempus AI has expanded its footprint in both oncology and rare disease analytics.

However, Tempus AI is not the only player to attract investor attention. Backed by accelerating innovation, increased FDA clearances and growing healthcare cost concerns, AI-driven healthcare companies like Butterfly Network BFLY and Health Catalyst HCAT have the qualities to emerge as the next big players.

Digital Transformation to Accelerate in 2025

Healthcare is catching up with other industries in terms of going digital. Though hospitals still use outdated systems like fax machines and manual data entry, Deloitte claims that in 2025, 70% of leaders plan to invest in digital tools, and 60% want to upgrade core technologies like EMRs and ERP software. About 90% of executives expect digital technologies to speed up in 2025, with half predicting major changes.

Cybersecurity is another critical area of focus in 2025. As digital adoption accelerates, so does the risk of cyber threats. Recognizing that future attacks are not a possibility but a near certainty, 78% of executives are prioritizing cybersecurity enhancements in 2025.

Deloitte suggests that generative AI is already proving its value for a substantial portion of organizations, with more than 40% reporting significant-to-moderate return on investment. Meanwhile, 37% say it’s too early to tell, which indicates that many companies are still in the early stages of implementation or evaluation.

2 Stocks With Solid Prospects for 2025

Butterfly Network: This digital imaging company is gaining popularity with its proprietary Ultrasound-on-Chip semiconductor technology and ultrasound software solutions. In 2018, Butterfly launched the world’s first handheld, single-probe, whole-body ultrasound system, Butterfly iQ. It was followed by iQ+ in 2020 and iQ3 in 2024, each with improved processing power and performance by leveraging Moore’s Law. Butterfly Network combines advanced hardware, intelligent software, AI, services and education to drive the adoption of affordable, accessible imaging.

This Zacks Rank #2 (Buy) company is expected to report 5.9% earnings growth on an 18.9% increase in revenues in 2025. Butterfly Network beat earnings estimates in each of the last four quarters, with the trailing four-quarter average surprise being 32.9%. Butterfly Network currently has an average brokerage recommendation (ABR) of 1.00 on a scale of 1 to 5 (Strong Buy to Strong Sell), unchanged over the past three months.

Health Catalyst: This company works to provide data and analytics technology and services that ignite smarter healthcare, lighting the path to measurable clinical, financial, and operational improvement. Currently, more than 1,000 organizations worldwide rely on Health Catalyst's offerings, including its cloud-based technology ecosystem Health Catalyst Ignite, AI-enabled data and analytics solutions, and expert services to drive meaningful outcomes across hundreds of millions of patient records.

This Zacks Rank #3 (Hold) stock is expected to report 7.1% earnings growth on a 9.2% increase in revenues in 2025. Health Catalyst’s 2026 expected earnings growth rate is pegged at 38.3%. HCAT currently has an ABR of 1.67. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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