Health-Tech Revival: 3 Stocks Set for a Big 2025 Rebound

Key Points

• Healthcare technologies are driving innovation, with companies like Health Catalyst, Tempus AI, and Elevance Health leading the way.
• New platforms like HCAT’s Ignite and Tempus AI’s Olivia offer significant growth opportunities in 2025.
• Analysts project strong upside as these companies address inefficiencies and improve patient care.

The healthcare industry is undergoing rapid transformation, driven by advancements in technology, artificial intelligence, and data analytics. Companies at the forefront of this shift are redefining how healthcare providers manage data, deliver care, and enhance patient outcomes. From Health Catalyst’s NASDAQ: HCAT innovative Ignite platform to Tempus AI’s NASDAQ: TEM groundbreaking health app and Elevance Health’s NYSE: ELV focus on recovery and profitability, these organizations are leveraging technology to address inefficiencies and meet growing demand.

Health Catalyst’s Ignite Platform Is a Catalyst for Growth

Health Catalyst’s share price has moved solidly down to start the year, declining 18%. However, recently released Wall Street price targets show massive upside in the stock. Among five price targets tracked by MarketBeat released in January, their average sits at $9.20 per share. This figure implies the company’s shares could rise 59% from their current level. Health Catalyst is a software company that healthcare providers use to organize their data. It helps healthcare providers see medical, financial, and operational data. This way, they can balance their business priorities. The company also has analytics tools that provide insights into how clients can improve their business. The company aims to help the healthcare industry eliminate wasteful spending, estimated to be $1 trillion annually.

A reason 2025 could be a big year for Health Catalyst is the chance to add new clients and move existing ones to its next-gen platform, Ignite. The company rolled out Ignite in 2024, and signs from early adopting clients are positive. Ignite provides the same basic features as the company’s old platform for a lower cost. However, the company has observed that clients end up spending six times more when using Ignite. They see its greatly improved capabilities over the basic system. So, they spend a lot on extra features. The company has what seems to be a highly achievable goal of adding 40 Ignite clients in 2025. This means that they only need to convert 4% to 5% of their 900 “app-based” clients. It could significantly outperform this goal, which would be a boon to revenue and potentially the stock price.

Tempus AI: New AI-App Sparks Optimism

Tempus AI’s share price has already started its rebound in 2025. Over the past week, shares have been up over 58% as of the close of Jan. 23. The company’s share price has fluctuated wildly since its June 2024 initial public offering (IPO). It reached $78 per share by Nov. and then dropped all the way down to below $32 after the company's preliminary Q4 financial results. It missed revenue estimates. Still, revenue grew by a brisk 35% in Q4.

The company’s share price soared after it announced the launch of its new AI-powered health app, Olivia. The app allows patients to have all their medical data in one place. It combines hospital records, doctor conversation transcripts, and data from monitoring tools such as Apple Health. The app functions like a personalized chatbot to understand one’s health status. It can help explain complicated medical information simply, without having to wait to speak with a doctor.

Tempus AI is well-placed to benefit from the rise of precision medicine and AI in health care. Its over 20 petabytes of data create a moat that will be difficult for others to replicate. The app will further increase the data the company has available, making its insights more valuable. As users get value out of the app, some will purchase the company’s genomics testing services. Companies developing new drugs can then buy the data collected from these tests. Over several years, Tempus multiplied its initial revenue from a genomics test many times over by selling the genomic data to drug developers. Overall, the app's introduction allows Tempus to collect more of its most valuable commodity: information.

Elevance: Beaten-Down Insurer With Bottoming Profitability

Elevance Health’s share price has started 2025 off nicely, up over 9% on the year. It provided a total return of -21% in 2024. Shares gained moderately after the company reported its Q4 earnings on Jan. 23. It beat estimates on both revenue and earnings. The company mainly sells insurance. However, it also provides data analytics to healthcare providers and members. It does this mostly through its Carelon Services business, which it sees growing at a mid-teens annual rate in the long term.

Overall, the case for Elevance in 2025 arises more from the fact that the market has beaten down the stock more than it should. The company’s medical loss ratio has climbed significantly in 2024. However, in the first half of 2025, it sees that number peaking and then falling in the second half of the year. A declining medical loss ratio boosts profitability. With near-term expectations relatively low, the stock can rebound as profits improve. The company’s adjusted operating margin of 2.3% sits at a historically low level, giving it the opportunity to improve significantly.