AI Becomes New 'Front Door' to Healthcare, Aiding Telemedicine Sector
A report that 40 million people use ChatGPT for daily health guidance signals a potential catalyst for struggling digital health stocks like Teladoc and Doximity.
A fundamental shift in patient behavior, driven by artificial intelligence, is creating a new potential growth catalyst for the beleaguered digital health and telemedicine sector. According to a recent OpenAI report, an estimated 40 million people are now using ChatGPT daily for health guidance, positioning AI as an informal 'front door' to the healthcare system.
This development comes as a potential tailwind for a sector that has faced significant headwinds since the waning of the pandemic. Companies that were once investor darlings have seen their valuations compress. Teladoc (NYSE: TDOC), a giant in virtual care, has seen its stock trade near a 52-week low of $6.35. Similarly, Doximity (NYSE: DOCS), a networking platform for medical professionals, recently touched its own 52-week low of $43.25.
The widespread adoption of AI for preliminary health inquiries—from symptom checking to understanding complex insurance terms—suggests a future where patients arrive at a doctor's office or virtual appointment better informed. This trend could directly benefit telehealth platforms by driving more qualified and prepared patient traffic.
For companies like Teladoc and American Well (NYSE: AMWL), this shift could help reignite user growth. An informed patient, having already explored initial questions with an AI, may be more inclined to seek a professional consultation for diagnosis and treatment through a convenient virtual channel. Teladoc, which closed Tuesday's session at $7.68, is already deepening its AI integration, expanding a collaboration with Microsoft to automate clinical documentation and reduce physician burnout.
While Teladoc's stock has declined over 21% in the last three months, Wall Street analysts maintain a cautiously optimistic outlook, with an average price target of $9.15, suggesting a potential upside.
The implications extend beyond patient-facing platforms. Doximity, which provides AI-powered workflow tools for clinicians, stands to gain as AI becomes more integrated into the entire healthcare ecosystem. The company reported that usage of its AI documentation tool, Scribe, nearly tripled in the last quarter. This indicates strong demand from physicians looking to leverage technology to streamline administrative tasks. Despite its recent stock performance, Doximity holds a "Moderate Buy" consensus from analysts, with a price target of $67.90.
The broader telemedicine market is still projected for significant growth, with some estimates suggesting it could more than double from $120.4 billion in 2023 to $285.7 billion by 2028. The integration of AI into patient discovery and clinical workflows represents a powerful new dynamic in achieving that potential.
While the digital health sector's path to recovery remains complex, the organic adoption of AI by millions of patients marks a significant behavioral change. For investors who have watched these stocks pull back sharply from their pandemic-era highs, this emerging trend could be the first sign of a new, technology-driven chapter of growth.