7 Best AI-Powered Biotech Stocks to Buy in 2025

AI-powered biotech stocks in 2025 show what happens when innovation, data, and capital collide — and this convergence creates opportunities, but also high volatility. For traders, these companies aren’t just about potential therapies, they’re about timing entries and exits based on hype, earnings, partnerships, and clinical trial news. Understanding the real story behind each ticker — and why it matters now — is how you stay prepared, not reactive.

Check out my AI penny stocks watchlist for more picks!

7 AI Biotech Stocks to Watch in 2025

Here are seven AI biotech stocks to watch closely:

Before you send in your orders, take note: I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.

The best traders watch more than they trade. That’s what I’m trying to model here. Pay attention to the work that goes in, not the picks that come out.

Successful biotech trading is less about fundamental analysis and more about pattern recognition. Low-float runners like Bright Minds Biosciences spiked 3,000%*, while Ensysce Biosciences offered another big swing with a float under 10 million shares. Waiting for consolidation after the initial spike, as with ENSC, can set up more favorable entries. Monitor SEC filings and float information to avoid surprise offerings or delisting risk. For a real-time example of how I approach volatile biotechs, see our discussion of biotech stock trading patterns.

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Recursion Pharmaceuticals (NASDAQ: RXRX)

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Recursion Pharmaceuticals is focused on industrializing drug discovery through artificial intelligence and advanced biological data analytics.

RXRX has drawn attention from both traders and analysts for its volatility, driven by developments in its AI platform and major partnerships like the MIT-backed Boltz-2 project. This new AI model increases drug discovery speed by up to 1000x and leverages Recursion’s BioHive-2 supercomputer, which runs over 500 NVIDIA H100 GPUs — a real signal of scale in this space. But as I teach students, just because a company is innovative doesn’t mean the stock is a buy right now. Clinical trial results, workforce cuts, and lawsuits have all shaken investor confidence in recent months.

Read more on RXRX: RXRX: Market Moves and Future Projections 

Evaluating AI-driven biotech means understanding their research engines. Companies like Recursion use AI and supercomputers to map biology. Others like Schrödinger run physics-based simulations and license software while developing their own drugs. Because many firms are early-stage and cash-hungry, look at metrics such as price-to-sales, cash burn and pipeline depth. For more detail on these metrics, review our list of AI drug-discovery stocks.

The stock has been beaten down, and Morgan Stanley recently lowered its price target to $5. That said, average analyst expectations still sit around $7.17, suggesting potential upside if execution improves. I’ve seen stocks like this create opportunity for disciplined traders — especially when a bounce follows oversold conditions or heavy news-driven moves.

Gilead Sciences (NASDAQ: GILD)

Gilead Sciences uses AI and advanced analytics to improve outcomes in HIV prevention and oncology drug development.

GILD isn’t a typical penny stock, but I include names like this because sometimes big-cap biotech names move with more predictable patterns, especially around earnings or FDA catalysts. Gilead has a robust pipeline, including 16 late-stage programs and a newly approved HIV PrEP injection that’s expected to bring in billions. Despite a recent FDA hold on two other HIV trials, the company is showing stability with a strong balance sheet, $7.9 billion in cash, and a forward P/E ratio under 14.

In my trading and teaching experience, setups around established pharmaceutical stocks often present less risk for newer traders — especially when paired with strong revenue ($28B+ annually), profitability (20.8% net margin), and market support. The PEG ratio of 0.7 suggests it could still be undervalued, even after a strong run this year.

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AbCellera Biologics (NASDAQ: ABCL)

AbCellera Biologics focuses on accelerating antibody discovery using machine learning and data-rich platforms.

ABCL is a unique AI biotech play because of its cash position and focus on long-term R&D expansion rather than near-term profitability. Its $605 million in reserves gives it over four years of cash runway, even with an annual burn of around $143 million. The company’s growth outlook remains mixed due to declining revenue, but its platform has drawn attention from major pharma companies and venture capital.

From a trader’s perspective, this type of setup — a stock with high potential, deep pockets, but low near-term revenue — often creates sharp moves around any news related to partnerships or development milestones. I train students to treat these low-float tech-biotech hybrids carefully. They can spike fast on PR or rumors, but they also fade fast. Knowing how to cut losses and wait for confirmation is key.

BioXcel Therapeutics (NASDAQ: BTAI)

BioXcel Therapeutics applies AI to develop neurological treatments, most notably for agitation and Alzheimer’s disease.

BTAI stock has been in freefall, down over 90% from last year, with serious questions about delisting, cash burn, and overall viability. That said, Lucid Capital recently initiated coverage with a $66 price target based on optimism around Igalmi, its sublingual film for agitation, and its at-home Alzheimer’s trial. The company is targeting a huge market — over 7 million Alzheimer’s patients in the U.S. — but the numbers don’t lie: last reported quarterly revenue was just $170,000.

As someone who’s traded stocks under $2 for over two decades, I’ve seen setups like this before — where the potential for a rebound exists, but only if the company can get its act together. Right now, the risk is high. However, if BioXcel regains Nasdaq compliance and releases strong Phase 3 data, there could be a short-term spike. That’s the kind of opportunity that rewards preparation over prediction.

Schrödinger, Inc. (NASDAQ: SDGR)

Schrödinger uses a physics-based computational platform enhanced by AI to design small molecule drugs.

SDGR recently got Fast Track designation from the FDA for its MALT1 inhibitor, SGR-1505, targeting rare blood cancers. This gives the stock a legitimate near-term catalyst and the potential for accelerated approval if the clinical trial data continues to trend well. The company’s AI software is also used by partners to model protein-ligand interactions, offering potential revenue from software licensing as well as internal drug development.

In my teaching, I emphasize how biotech stocks with a dual revenue model — services and internal pipeline — often have more stability. Schrödinger has shown that, with moderate revenue growth and strong R&D investment. As always, the chart and news timing will tell you when to enter. Don’t guess. React to the pattern.

Pfizer Inc (NYSE: PFE)

Pfizer is integrating AI across its R&D operations to target cancer and expand its data-driven drug discovery approach.

In addition to its AI drug discovery prospects, Pfizer made my best overall healthcare stock watchlist!

While PFE has struggled post-COVID, its investment in AI and the acquisition of Seagen give it exposure to precision oncology — one of the most promising applications of machine learning in biotech. Analysts believe Pfizer could be one of the next major AI winners in the pharmaceutical industry. The company trades at a forward P/E of about 13, pays a solid dividend, and is making strategic moves to reduce costs and drive innovation.

I tell students that when a big name is trading near support, and it’s backed by billions in revenue and AI-driven momentum, it’s not a hype play — it’s a timing opportunity. That doesn’t mean you hold long term. It means you look for a setup where the stock can grind higher off lows or spike on an earnings surprise, FDA news, or partnership.

Tempus AI Inc (NASDAQ: TEM)

Tempus AI builds AI-powered precision medicine platforms using real-world oncology data to support cancer drug discovery and clinical development.

TEM just inked a $200 million data licensing deal with AstraZeneca and Pathos AI to build a foundation model for oncology. This is a big milestone, signaling validation of Tempus’ technology and its 10-year investment in cancer-related data aggregation. The company recently announced a $400 million convertible note offering to pay off debt and expand operations, which caused short-term stock pressure.

Dive deeper into this standout name in our Tempus AI stock analysis.

This is the type of setup I’ve traded for years: a new IPO with high institutional interest, real revenue potential, and headline-driven spikes. The offering created a pullback, but smart traders will watch how it consolidates. If the market sees this deal as a positive, you could get a bounce. If the offering weighs it down longer, be patient. Watch volume.

How to Evaluate AI Biotech Stocks

Evaluating AI biotech stocks means understanding both the science and the setup — and that comes with experience.

These stocks live and die on clinical trials, FDA approval cycles, and AI breakthroughs. But for traders, the biggest price moves often come before the news is fully priced in. That’s why it’s important to watch funding rounds, analyst rating changes, and insider activity. When these stocks run, they usually do so on news that hints at future growth, not current profitability.

From my experience teaching thousands of students, the key is to look at runway (cash vs. burn), pipeline (how advanced are the trials), partnerships (who believes in the platform), and stock behavior (volume, float, volatility). This is a data-driven sector, but trading it successfully is just as much about pattern recognition and discipline.

The biotech sector can produce life-changing gains and gut-wrenching losses. Low-float penny stocks like Tonix Pharmaceuticals skyrocketed 570%* on a Department of Defense contract and now hinge on an upcoming FDA decision. BioXcel jumped on Phase 3 trial news but could fall below $3 if results disappoint. Micro-caps often move on tiny catalysts, so use tight stop losses and don’t overstay your welcome. For specific setups and risk parameters, read our biotech penny stock guide.

Future Outlook for AI Biotech Stocks

The future of AI biotech stocks is tied to how well companies can lower costs and accelerate timelines for therapies.

As technology improves, especially with multimodal models and generative AI, the process of drug development could shift from a 10-year cycle to something much faster and cheaper. That opens the door for smaller, agile biotech companies to disrupt bigger players — or get acquired. For traders, that means opportunities will keep coming, but the hype cycles will be sharp and unforgiving.

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What I’ve learned over 20+ years of trading is that sectors like this will keep producing short-term spikes. But only those who stay informed, focused, and patient can capitalize. You don’t need to trade every name — just wait for the right setup and know the story behind the move.

Ethical Considerations in AI and Biotech

AI in biotech raises serious ethical questions, especially around patient data, clinical decisions, and regulatory oversight.

These tools rely heavily on real-world health data, and how companies store, anonymize, and use this information is under constant scrutiny. There’s also concern about bias in AI models, which can impact trial design or patient outcomes. As a trader, you need to be aware of this — not just because of the moral implications, but because any regulatory backlash or lawsuit can hit a stock overnight.

I teach my students not to ignore these external risks. Just like trial results or earnings, ethics-related headlines can move markets. Traders who understand this broader picture stay one step ahead.

Key Takeaways

• AI biotech stocks offer a mix of innovation, risk, and short-term opportunity — but you must trade them with structure and discipline.
• The best setups come when data, news, and momentum align.
• Cut losses quickly — and be careful which stocks you hold overnight. Biotech penny stocks are notorious diluters.

This is a market tailor-made for traders who are prepared. Biotech stocks thrive on volatility, but it’s up to you to capitalize on it. Stick to your plan, manage your risk, and don’t let FOMO drive your decisions.

These opportunities are fast and unpredictable, but with the right strategy, you can make them work for you.

If you want to know what I’m looking for — check out my free webinar here!

Frequently Asked Questions

What Should I Look for in a Biotech Company Using AI?

When evaluating a biotech company, focus on how it uses AI to enhance research and accelerate the development of new products. Check whether their technology leads to measurable improvements in clinical trial efficiency or drug discovery outcomes. Consistent performance in securing partnerships, funding, or regulatory progress shows the company has real momentum.

How Do AI Biotech Stocks Impact My Portfolio Strategy?

AI biotech stocks can boost your portfolio’s growth potential but also raise its overall risk due to volatility and uncertain timelines. For investors focused on returns, these trades should be sized appropriately and not dominate your allocation. Use these positions as high-risk, high-reward plays — and track valuation changes carefully.

What Role Does Regulation Play in AI Biotech Trading?

Regulation affects everything from clinical trial timelines to how AI models are validated for healthcare use. If a biotech company struggles with compliance or receives negative feedback from the FDA, shares can drop quickly. Traders must stay updated with ongoing developments, as regulatory news can change performance expectations overnight.

How Important Are Sales and Manufacturing in These Companies?

Many AI-driven biotech stocks still rely on partnerships or licensing rather than large-scale sales or manufacturing. However, once a product gains approval, efficient production and commercial distribution become critical for revenue generation and long-term viability. This transition stage often draws fresh interest from funds and can act as a breakout trigger.

What Insights Can Help Me Analyze These Stocks Effectively?

Use data-driven tools for analysis and compare insights across companies based on product pipelines, funding sources, and AI integration levels. Focus on how each biotech company positions itself in healthcare innovation and whether their research supports commercial viability. Solid analysis can help you avoid overhyped names and stay focused on setups with real potential.