AI explosion creates monster investment opportunity

Disclaimer: The figures mentioned in this video are based on data from June 2024. For the most current and accurate financial information, refer to the latest report or official sources.

By Tim Collins • Editor in Chief, Streetlight Confidential

Fri, August 2, 2024 9:00 A.M. CDT · 10 min read

In my 25 years as an investing advisor, I have seen a market opportunity that has quite as much potential as tha AI megatrend… and, within that trend, I have never seen a company quite as spectactular as the one I am about to put before you. 

You’ve seen the tremendous potential of AI stocks over the last 18 months — in fact, AI stocks have created generational wealth practically overnight. Some of the top performing AI stocks include household names like: 

• Nvidia (NYSE: NVDA): Nvidia has been the most visible winner in the AI sector over the last year, thakns to its cutting-edge graphics processing units (GPUs) and AI chips and first mover advantage. The company’s stock has seen gains of more than 223.67% from June 2023.
• Palantir Technologies (NYSE: PLTR): Known for its big data analytics and deep connections with the defense sector, Palantir has seen massive growth in both government and commercial revenues. The company’s stock has soared by 263.4% in the last 18 months.
• Symbotic (NASDAQ: SYM): This AI-enabled robotics company has shown impressive growth as well. The company has recently reported significant revenue increases and a sizeable backlog of projects… and investors are responding. Its stock shot up by 244.47% since December 2022. 

But, in my opinion, those “household names” are just the tip of the iceberg… which is why I’m recommending that my subscribers begin their due diligence immediately on the company I am about to reveal.

After all, investors who act quickly on this megatrend will be aligning themselves with billionaires, market leaders and industry innovators like Elon Musk. 

More on that in a moment. 

Before I get to that, I want to share with you a small portion of what I uncovered on one surprising company that has the potential to be the AI megatrend’s most exciting investment. And it’s one that, in my opinion, is currently significantly undervalued. 

In a megatrend as explosive, competitive and dynamic as AI, I support my Streetlight Confidential Newsletter subscribers by ignoring the hype and focusing on two things: First, I research niches within the megatrend that have dramatic upside potential. Second, I uncover a little-known company within a niche that’s poised to dominate.

I recently alerted my paid Streetlight Confidential Newsletter subscribers that, using our strict criteria, the research team here at Streetlight Confidential has uncovered an AI niche with explosive potential … … and one surprising company that has all the right ingredients to become the stock that blows up the AI bubble. 

The niche? Healthcare. 

The company? HEALWELL AI (OTCQX: HWAIF; TSX: AIDX). 

In a moment I’ll share five little-known reasons why HEALWELL AI is my latest subscriber pick, and why I think you should consider speaking to your investment advisor about starting your due diligence on the company right away. But first, let me tell you a little more about the company, as well as three critical catalysts that are driving overwhelming demand for the company’s AI healthcare diagnostic tools.

Making a Smart Investment in a One-of-a-Kind Healthcare And AI “Double Shot”

HEALWELL AI is a company operating at a unique intersection of the AI and healthcare industries … and it’s one that: 

• Is already growing rapidly with multiple revenue streams … at gross margins as high as 80%; 
• Generated $5.3 million in revenue in its first few months of existence and has projected revenues of $47.5 million in 2024; 
• Has more than 10,000 paid clients in the healthcare industry; and 
• Is cashed up and expects to continue to grow its topline significantly by the end of the year. 

The company is deeply embedded in Elon Musk’s xAI initiative — and, from what my research team could uncover, it’s the only healthcare AI company participating in xAI. This unprecedented partnership grants HEALWELL AI invaluable access to xAI’s exclusive tech stack and massive data moat. Additionally, HEALWELL AI has received a major vote of confidence from the family fund of billionaire Robert Agostinelli, as it recently acquired a stake in the company. 

Stick around until the end and I’ll elaborate on what that could mean. 

But before I get to that, there’s so much more to unpack … like, for example, HEALWELL AI’s path from $47.5 million in revenue to $73 million in revenue by year-end. 

I’ll outline that path (and more) in a moment. But before I reveal my five reasons why HEALWELL AI is my pick for the AI megatrend’s most impressive company, I want you to understand the monumental opportunity in front of HEALWELL AI … due in large part to three critical catalysts driving explosive demand for the company’s clinically proven AI products.

CRITICAL DEMAND CATALYST 1: Declining Population Health 

As of 2020, the United States had the highest avoidable mortality rate among high-income countries. Chronic conditions are on the rise, with 16.1% of adults aged 65 and older having three or more chronic diseases. This escalating health crisis has amplified the complexity of medical treatments, creating an overwhelming need for AI-assisted technology. 

According to Harvard’s School of Public Health, using AI to make diagnoses may reduce treatment costs by up to 50% and improve health outcomes by 40%. 

CRITICAL DEMAND CATALYST 2: Healthcare System in Crisis 

The U.S. healthcare system is under immense strain, with doctors experiencing high stress levels, ever-increasing wait times for patients, and more than $850 billion wasted annually due to inefficiencies and error. In fact, medical errors are estimated to cause more than 250,000 deaths annually, making it the third leading cause of death after heart disease and cancer. 

Moreover, misdiagnosis and late diagnosis contribute to nearly 800,000 deaths or cases of permanent disability each year … … Which has created an overwhelming need for AI-assisted technology. 

AI tech can perform calculations 100,000 times faster than any human, can diagnose in seconds what formerly would take hours or days, and can provide continuous monitoring and personalized treatment plans at a scale no human could possibly match. 

CRITICAL DEMAND CATALYST 3: Unprecedented Need for New, Effective Drugs 

This, in my opinion, is the true “blue sky” for companies operating in the healthcare AI space. 

The global pharmaceutical market generates more than $1.5 trillion in revenues annually, with the United States accounting for 40% of those revenues. 

But despite those impressive figures, Big Pharma is hitting an unexpected obstacle: finding new patients to serve. This is because the industry has shifted focus from addressing common health issues to treating rare and complex diseases, which are challenging and costly to address due in part to the difficulty of finding the right patient populations. 

Billions of dollars and hundreds of thousands of lives annually are at stake. And an AI that can streamline the identification of populations needing specific treatments offers truly massive profit potential. 

The critical challenge for these companies is access to high-quality patient data. 

Due to patient privacy regulations like HIPAA, a company with legal access to a high quality data pool will have a significant competitive advantage over the coming years. Which brings me to my five-star subscriber pick in the AI space … 

Reason #1: HEALWELL AI’s Priceless Data Pool 

I have been telling my Streetlight Confidential Newsletter subscribers for a while now that I believe the difference between a few AI megatrend winners and the many also-rans is going to be the quality of the data pool. And, in my research, the data pool to which HEALWELL AI has exclusive access is by far the most impressive I was able to uncover. 

The company has partnered with Canada’s largest healthcare provider network, WELL Health, and has exclusive rights to its pool of patient data. WELL Health Technologies Corp. (TSX: WELL) is the largest healthcare technology company in Canada, with combined top-line revenues of more than $838.19 million in Canada and the United States. And the company is growing at a rate as high as 40% per year.

HEALWELL AI’s annual revenue is projected to nearly double, according to analyst consensus, over the next two years. *Analyst estimates do NOT include growth from M&A. 

The partnership with WELL Health provides HEALWELL AI with the opportunity to integrate with the software systems of over 3,000 practitioners throughout North America. That’s because WELL Health not only operates the 167 clinics where patient visits regularly take place … they also own and operate the software that the physicians in those clinics use.

Bottom line? WELL Health does roughly 5.2 million unique patient visits annually in the United States and Canada … and HEALWELL AI has exclusive access to the data generated by each and every one of those 5.2 million visits. 

That’s a truly massive data pool that is now fueling HEALWELL AI’s proprietary technology — and no one else’s. 

Simply put, when you invest in HEALWELL AI, you’re also investing in the capabilities of the entire WELL Health corporate development machine, as the success of HEALWELL AI is also critical to the success of WELL Health. 

A huge benefit of this relationship to HEALWELL AI involves WELL Health’s extensive experience in the M&A space. WELL Health has done almost $730.4 million in M&A and more than 80 transactions over the last five years. HEALWELL AI is not only following that same roadmap, but the company is using the same team that helped close those M&A transactions for WELL Health. 

Plus, remember the software integrations I mentioned above? 

This is critical because relying on third-party software providers can involve delays while waiting for software updates or permission for integration. And other AI companies frequently hit this potentially time-consuming stumbling block time and time again. 

But thanks to its strategic partnership with WELL Health, HEALWELL AI is able to quickly integrate into these software systems and scale into the provider footprint. 

As an investor, whenever I see a company with access to exclusive IP or a completely unique, robust data moat with the potential to disrupt a multi-trillion-dollar industry like healthcare … it catches my attention. 

It’s difficult to say exactly how much HEALWELL AI’s exclusive data pool is worth … but fortunately they do have some concrete financial numbers that I find very impressive. Which brings me to the second reason I am recommending my subscribers begin their due diligence on HEALWELL AI (OTCQX: HWAIF; TSX: AIDX) as quickly as possible … 

Reason #2: HEALWELL AI’s “Triple Play” Revenue Model 

As I assess companies for my subscribers, I consider one solid revenue source to be okay. Two is good. I was impressed to discover that HEALWELL AI’s unique business model does one better, by generating revenue in three distinct categories. 

Many of the flashy, startup AI companies that you hear so much about promise to “change the world” in some form or fashion. But most of those companies have a dirty little secret they try to hide from you: In spite of having what they consider to be a great idea … they don’t generate any revenue. And they quickly end up going broke. 

Contrast that with a company like HEALWELL AI. 

HEALWELL AI (OTCQX: HWAIF; TSX: AIDX) is not only doing great work that is truly impacting thousands of lives in a positive way … the company is also already generating millions of dollars in revenue at significant margins. 

By having multiple revenue streams — each capable of delivering significant revenue to the company on its own — with substantial gross margins, HEALWELL AI has established an unusually strong financial foundation. 

Here are the three distinct areas where the company generates its revenue: 

Massive Gross Margins Yield Impressive Results 

First, the company’s largest revenue generator is its pure AI and data science-oriented revenue. 

This is a recurring revenue stream in a high-growth industry that delivers margins as high as 70% for the company. 

Much of this revenue comes from the company’s subsidiaries – including Pentavere and Khure Health – which extract data, unlock insights and allow the company to explore early detection of disease. Customers for HEALWELL AI’s artificial intelligence and data science solutions include pharmaceutical companies, life sciences companies and precision medicine companies, including Fortune 500 giants like Johnson & Johnson and Bayer USA. 

HEALWELL AI’s second revenue stream is its healthcare software. The company sells its AIpowered healthcare software to healthcare providers, hospitals and clinics. This not only brings in mature revenue and free cash flow for the company — with margins of 80% or higher — but also provides access to additional data and more physicians, helping ensure further growth. 

The third and final revenue stream for HEALWELL AI is in patient services and clinical research. Though this revenue stream’s margins are “only” 28%, customers for this revenue stream include government reimbursement, health insurance reimbursement and life science research, and growth appears to be robust for the near future. 

With strong growth and impressive gross margins in not one but three areas, HEALWELL AI appears poised to dominate the AI megatrend in the healthcare space.

With three revenue streams already pulling in millions of dollars in revenue, and gross margins as high as 80%, the company is poised for aggressive expansion … and it’s already beginning to execute. 

This smart, aggressive growth strategy is the third reason I am recommending HEALWELL AI (OTCQX: HWAIF; TSX: AIDX) to my subscribers. 

Reason #3: HEALWELL AI’s Impressive Growth Trajectory 

HEALWELL AI has already demonstrated rapid revenue growth … and analysts are predicting more growth ahead. 

The company, which debuted on October 1, 2023, ended the year with a top-line of $5.3 million in revenue. Since that time, through acquisition, the company’s trailing 12-month top-line revenue has climbed to $47.5 million. Plus, since its debut, the company has already completed four acquisitions … and it has several more on the horizon. 

More on that in a minute. 

As of this writing, HEALWELL AI has just brokered two additional revenue-positive acquisitions. These deals, which closed in July 2024, are anticipated to take HEALWELL AI’s anticipated annual revenues from $47.5 million to $73 million by year-end.

In its short lifetime, the company has established over 17 commercial clients, including blue chips like Johnson & Johnson and Bayer USA. In fact, the company already lists six of the top ten largest pharmaceutical companies as its clients. 

With a share price under $1.75 as of early July 2024, well under the consensus target price average of $2.83, HEALWELL AI could provide early investors with significant profits quickly as the company hits Wall Street’s radar. 

Several respected analysts are projecting good things for shares of HEALWELL AI (OTCQX: HWAIF; TSX: AIDX) as well, with most of the price targets representing gains of 64.5% or more from the current share price as of early July 2024. 

And as impressive as those numbers are, my projections for the company are even more optimistic. 

A History of Smart, Aggressive Acquisitions 

The company’s growth strategy includes a heavy reliance on M&A activity. The company’s M&A strategy is focused on two distinct “buckets.” 

The first bucket includes AI companies in healthcare that are focused on early detection. 

The first company acquired in this bucket is Pentavere, a globally recognized and award-winning AI digital health company that has built a best-in-class AI engine to identify patients that are eligible for approved medications or interventions, to improve outcomes for patients and help drive therapy growth and penetration. 

The second bucket is focused on mature operating companies that have powerful platforms. This includes healthcare software companies, research platforms and digital health companies. 

A big criterion for companies acquired in this is that they bring in strong financial fundamentals … such as recurring revenue and free cash flow. An example of this type of acquisition is the company’s subsidiary Khure Health, an AI health technology company that is actively working with and/or has rare and specialty disease programs in development with six of the top 10 pharma companies and international disease associations. 

Most recently, in July 2024 HEALWELL AI finalized the acquisitions of VeroSource Solutions Inc. and BioPharma Services Inc. … two major acquisitions that are anticipated to be a significant boost to its annual revenue and profitability. 

VeroSource serves five provincial health clients across Canada with a cloud-based data platform for seamless healthcare data access. 

BioPharma, one of Canada’s largest CROs, specializes in bioequivalence and early-stage clinical trials, with over 2,200 trials completed for around 250 pharma clients. 

These acquisitions not only expand HEALWELL AI’s tech stack and reach, they also represent a significant bump in the company’s top line revenue At the moment, HEALWELL AI is looking at a number of additional companies that are focused on early disease detection in different subspecialties and different clinical domains. HEALWELL AI is looking to acquire those companies and build a unified clinical decision support platform. 

Having an aggressive expansion plan and — more importantly — the capital and the talent to pull it off successfully is something I consider a strong sign in a potential investment. 

HEALWELL AI has the plan, they have the capital, and, in my opinion, they have the talent. Which is my fourth reason for introducing HEALWELL AI (OTCQX: HWAIF; TSX: AIDX) to the Streetlight Confidential Newsletter subscribers. 

Reason #4: HEALWELL AI’s Experienced Leadership 

In my opinion, one of the biggest indicators of future potential success is leadership. Have they been there and done that? 

With HEALWELL AI (OTCQX: HWAIF; TSX: AIDX), the answer is a resounding yes. 

The company is led by an experienced team with a history of success in both healthcare and technology. For example, CEO Dr. Alexander Dobranowski is a medical doctor with more than 15 years of clinical experience. He’s published multiple medical research papers and coauthored Radiology: Chest X-Ray Interpretation, a medical textbook that received the prestigious British Medical Association’s (BMA) book of the year award in 2014. 

More importantly, he is also the founder of multiple data-oriented tech startups including Deepscreen AI, a startup focused on structured reporting technology in diagnostic imaging, and MCI ONEHEALTH Technologies, a healthcare technology company that he successfully took public in early 2021, raising $22 million in proceeds on the TSX. 

In his years of specialized clinical and healthcare technology experience, he’s successfully led multiple teams in the development and execution of novel technology solutions to complex healthcare problems. This combination of professional acumen and tactical, real-world experience will, in my opinion, prove to be invaluable to taking HEALWELL AI to the next level. 

Board Chairman Hamed Shahbazi is the founder, CEO and Chairman at WELL Health, and the same man who grew the company to become the largest healthcare technology company in Canada with top-line revenues of more than $838.2 million. He is also the founder of TIO Networks, a company that was acquired by PayPal for $304 million. Additionally, he was named an EY Entrepreneur of the Year in 2022 by Ernst and Young. 

The company also just recently announced their new CFO, Anthony Lam, who has over 25 years of experience running high growth technology oriented public companies both in Canada and the United States. And the company added two co-chief operating officers (COO’s) to the team. Adam Hutton and Paulo Gomez, both richly experienced entrepreneurs with significant experience operating technology roll-up platforms. 

Finally, Don Watts, President of the Khure Health subsidiary, has over 20 years of experience in medical device and pharmaceutical sales. This combination of experience — from key management team members — is precisely what is needed to help ensure success. And so many times, it’s what an upstart tech company is sorely lacking. 

I’ve been impressed with HEALWELL AI’s leadership team each time I’ve met with them … and I feel strongly that their vision is one they are likely to turn into action in short order. 

For these reasons and others I am now urging readers of the Streetlight Confidential Newsletter to learn more about this opportunity and then consider if HEALWELL AI (OTCQX: HWAIF; TSX: AIDX) is right for their portfolio. 

Reason #5: HEALWELL AI’s Billionaire Buy-In 

Now, I want to talk about Healwell AI’s “X-factor” … its participation in Elon Musk’s new AI initiative. 

His latest tech venture, xAI, launched in July 2023, with the goal of advancing artificial intelligence by focusing on accelerating human scientific discovery. It’s already raised more than $6 billion in funding and, in its first year of existence, has a $24 billion valuation. 

xAI competes directly with OpenAI and its viral Large Language Model (LLM) ChatGPT, which, as of mid-2024, had a valuation of approximately $80 billion. OpenAI, which is partnered with market leviathan Microsoft, saw a growth of approximately 471% from 2021 to 2024. 

In my opinion, xAI could easily see similar growth rate and potentially even better, as the project has access to a proprietary, unique asset OpenAI doesn’t: the entire historical data set of X (formerly Twitter). 

Moreover, as one of the largest public forums on the Internet, that proprietary data pool is getting exponentially larger day by day. 

I don’t think I need to remind you that, in my opinion, the “secret sauce” that’s going to separate the AI winners from the losers is the quality of a company’s data pool … … and Elon’s going all-in to ensure that xAI has the best one around. 

This is why I am so excited that he chose HEALWELL AI as one of the very, very few partners he’s bringing in on the xAI project — and, from my team’s research, the only healthcare-focused AI company. What this means for HEALWELL AI is access to an additional exclusive data pool on top of the priceless WELL Health data, as well as access to xAI’s cutting-edge tech … something that sets HEALWELL AI apart from every other company I’ve looked at in the AI healthcare space. 

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