AI Innovations and Tariffs Shape Medical Info Systems Industry in 2025

The Medical Info Systems industry is on a significant growth trajectory in 2025, spurred by new federal initiatives and robust regulatory support. A driving force behind this expansion is Donald Trump’s $500 billion Stargate AI project, designed to enhance AI infrastructure across various sectors, including healthcare, with initial backing from companies such as SoftBank, OpenAI, Oracle, and MGX. According to a report from the Business Research Company, the application of AI within the medical device market is projected to experience a Compound Annual Growth Rate (CAGR) of 29.9% between 2026 and 2029. This rising demand for digital healthcare solutions offers lucrative opportunities for companies like Veeva Systems (VEEV), Hims & Hers Health (HIMS), and Butterfly Network (BFLY).

However, this optimistic outlook faces challenges from another aspect of Trump’s economic policy: tariffs. The administration’s recent hikes in tariffs—up to 145% on Chinese goods, 32% on Taiwanese imports, and 46% on Vietnamese products—pose a risk to America’s AI objectives.

Understanding the Medical Info Systems Industry

The Zacks Medical Info Systems industry includes companies that develop and sell healthcare information systems. These firms provide software and hardware solutions to healthcare providers, enabling secure and efficient access to real-time clinical, administrative, and financial data. Growing emphasis on patient satisfaction, data security, and managing administrative costs has intensified the need for advancements in big data, cloud computing, blockchain, and AI technologies. Key players like Omnicell and Allscripts are benefiting financially from the booming sales of software, related hardware, professional services, and ongoing service contracts for software maintenance.

Trends Influencing the Medical Information Sector

AI and Health

The medical field is a major adopter of AI, utilizing it for the synthesis of new drug compounds and the development of devices that enhance diagnostic precision and speed. Applications range from generative AI technologies to surgical robotics, particularly in diagnostic environments. Increasing prominence of tools like electronic health records and predictive analytics supports this trend. Trump 2.0’s $500 billion Stargate initiative aims to bolster this momentum by improving data management and interoperability. A Pragma Market Research report anticipates the global AI in healthcare market will reach $95.65 billion by 2025, with AI-powered innovations like Google’s DeepMind and Medtronic and Apple’s AI-enabled wearables driving enhanced diagnostics and continuous patient monitoring.

Rising Demand for Remote Healthcare

The remote patient monitoring segment within the medical info systems space is rapidly expanding, propelled by the increasing use of wearable devices and telehealth services. Greater awareness of the advantages of continuous patient monitoring has emerged as a key factor in enhancing the quality and efficiency of medical care. Furthermore, health tech products are transforming the diagnosis process and streamlining hospital workflows via robotics and AI-driven chatbots. According to a Custom Market Insights report, the global smart healthcare products market, valued at $145.9 billion in 2023, is expected to grow to $485.71 billion by 2032, achieving a CAGR of 12.78%.

Tariff Impacts on AI Ambitions

The sweeping tariffs imposed by the Trump administration pose significant challenges to America’s AI goals, especially in healthcare. While the $500 billion Project Stargate seeks to establish the U.S. as a global AI leader, escalating costs for imported hardware essential for AI infrastructure, such as servers and other equipment, complicate efforts to develop necessary data centers. Although semiconductor chips are exempt, many critical components for AI applications are now subject to high tariffs, adversely affecting the medical device sector that relies heavily on advanced technology for early disease detection, predictive care, and personalized treatment. This creates additional hurdles for smaller hospitals and startups as they navigate risky investment conditions amid uncertain trade relations.

Zacks Industry Rank Analysis

Currently, the Zacks Medical Info Systems industry holds a Zacks Industry Rank of #28, placing it in the top 11% of over 250 Zacks industries. This ranking, determined by averaging the Zacks Rank of its constituent stocks, indicates favorable near-term prospects for the sector. Historically, top-ranking Zacks industries outperform their lower-ranked counterparts by a ratio exceeding 2 to 1.

A closer look at several stocks with promising earnings outlooks will follow, though it’s prudent to first evaluate the industry’s historical shareholder returns and current valuations.

Industry Performance and Valuation Insights

Over the past year, the Medical Info Systems industry has trailed both the Zacks S&P 500 composite and its own sector. The industry has experienced a 6.6% decline over the past year, while the Zacks Medical sector saw a decrease of 4.4%, contrasting with the S&P 500’s impressive gain of 25.3% during the same period.

One Year Price Performance

Current Industry Valuation

Currently, the industry is trading at 3.95X based on its forward 12-month price-to-sales (P/S) ratio, compared to 4.56X for the S&P 500 and 2.50X for the sector. Over the last five years, the industry has fluctuated from a high of 15.78X to a low of 3.29X, with a median of 5.50X, illustrating the volatility within this segment.

Price-to-Sales Forward Twelve Months (F12M)

Price-to-Sales Forward Twelve Months (F12M)

Promising Stocks in Medical Info Systems

Veeva Systems provides cloud-based software applications and data solutions specifically designed for the life sciences sector.