GE HealthCare Technologies (GEHC): A Long-Term Play in AI-Driven Healthcare

The healthcare sector is undergoing a seismic shift as artificial intelligence (AI) reshapes diagnostics, treatment, and patient care. Among the companies positioned to capitalize on this trend is GE HealthCare Technologies Inc. (NASDAQ: GEHC), a top pick of Daniel Sundheim, founder and CIO of D1 Capital Partners. With a $272.5 million stake in GEHC as of late 2024—ranking it 7th in Sundheim’s portfolio—the firm is betting on the company’s AI-driven innovations and its role in a $5.4 trillion global healthcare market.

Why Sundheim Loves GEHC: AI as the New Infrastructure

Sundheim’s investment philosophy prioritizes public companies with scalable AI infrastructure, arguing that such firms will dominate the next decade. GEHC fits this mold. The company’s AI-powered CardIQ Suite, showcased at the 2025 American College of Cardiology conference, exemplifies its strategy. This tool uses machine learning to interpret cardiac imaging data, cutting diagnostic time and improving accuracy.

GEHC’s FDA approval in March 2025 for the Flyrcado imaging agent further strengthens its position. Flyrcado enables non-invasive detection of coronary artery disease, a condition affecting millions worldwide. Sundheim has emphasized that such advancements align with his belief that AI will “impact nearly every sector,” and companies like GEHC, with deep sector expertise, are best placed to profit.

Recent Performance: Navigating Headwinds

GEHC’s Q1 2025 results reflect both promise and challenges. While its $5.32 billion in revenue narrowly missed estimates, its $1.45 EPS beat forecasts by $0.19, signaling operational resilience. Analysts at Wells Fargo and Goldman Sachs have responded by raising price targets to $103 and $100, respectively.

Yet risks loom large. Piper Sandler’s April 2025 note, which lowered GEHC’s price target to $88 from $104, highlighted concerns over its significant exposure to China—a market critical to its supply chain and revenue. Trade tensions and tariffs could disrupt operations, a vulnerability underscored by Sundheim’s own acknowledgment that AI returns require a “decade-long horizon.”

The Analyst Consensus: Buy the Dip, Wait for AI to Pay Off

Despite near-term headwinds, the analyst community remains cautiously bullish. The average price target of $96.50 reflects expectations that GEHC’s AI investments will eventually drive growth. Sundheim’s firm, D1 Capital, has also doubled down: its 22% stake increase in Q4 2024 signals confidence in the company’s long-term trajectory.

The China Question: A Double-Edged Sword

GEHC’s reliance on China—a market contributing ~15% of its revenue—creates geopolitical risk. U.S.-China trade disputes could disrupt supply chains, as seen in the semiconductor and energy sectors. However, Sundheim’s strategy has historically focused on public companies with global scale, which can weather such storms through diversification. GEHC’s diversified portfolio (imaging, diagnostics, patient care) and 82% institutional ownership suggest investors are willing to ride out volatility for long-term gains.

Conclusion: A Patient Investor’s Dream

GEHC’s inclusion in Sundheim’s top picks is a testament to its dual strengths: proven healthcare technology and AI-driven innovation. While near-term risks like China exposure and valuation dips may deter short-term traders, the fundamentals remain compelling.

• Financials: A P/E of 15.64 and dividend yield of 0.21% offer stability, while its Q1 outperformance hints at operational efficiency.
• Market Position: Its FDA approvals and AI tools position it as a leader in diagnostic imaging, a $10 billion market growing at 5% annually.
• D1’s Track Record: The firm’s 44% return in public equities (2024) and 7.7% jump in January 2025 underscore its knack for identifying overlooked gems.

For investors with a 5–10 year horizon, GEHC’s valuation (trading at a discount to peers like Philips Healthcare) and Sundheim’s long-term vision make it a compelling bet. As Sundheim warned in his 2024 letter: “AI rewards patience.” In GEHC, he’s found a stock that could pay off handsomely for those willing to wait.