Alright folks, let’s talk about the biotech industry and how artificial intelligence (AI) is making its way into the game. Now, you might not be hearing as much about AI in biotech as you do in the software industry, but there are a few players who are using it to their advantage. Specifically, we’ve got Ginkgo Bioworks and Recursion Pharmaceuticals leading the charge here. And let me tell you, AI could be a game-changer for these companies in the long run.
Now, here’s the thing, neither of these companies is profitable at the moment. And that’s where the challenge comes in for investors. How do you separate the AI hype from the actual value that it brings? Well, that’s what we’re here to figure out. So, let’s dive in and compare how each company is using AI and determine which one is the better bet for your investment.
Let’s start with Ginkgo Bioworks. These guys have their own biofoundry where clients pay them to design, bioengineer, and manufacture microorganisms and biological molecules on a large scale. And guess what? They’re using AI, machine learning, and robotics to streamline the entire process. By doing so, they’re able to scale their services and make it more cost-effective for their customers. And that’s how they plan to make money and keep their shareholders happy.
Ginkgo is also making moves to strengthen its AI capabilities by teaming up with Alphabet. This partnership could bring them some serious efficiency improvements in the near future. And trust me, cutting costs is essential for Ginkgo, because despite increasing their second-quarter revenue, they still reported a loss. So, they’re on the right track, but they need to show that they can turn a profit before we can consider them a safe bet.
Now, let’s talk about Recursion Pharmaceuticals. These guys use AI and a massive amount of biological data to generate leads for drug development. They also do their own research and development. And hey, they’re even planning to license their data and discovery tools to other biotech companies. Sounds pretty cool, right?
But here’s the deal, Recursion is still a long way from profitability. Their revenue is solely coming from collaborations with big players in the pharma and agriculture sectors. And they reported a pretty big loss. Plus, it’ll be years before they commercialize any of their own medicines. So, if you’re looking for immediate returns, Recursion might not be your best bet.
Now, it’s important to keep in mind that neither Ginkgo nor Recursion has a monopoly on AI in biotech. Both companies have seen their stock prices drop over the past year, and they’re not exactly performing amazingly this year either. It’s gonna take some time for them to find their footing and start making serious profits, if they ever do.
But hey, Ginkgo seems to be on the right track. They’re growing faster than Recursion, and their stock is cheaper. So, they might be the better option for now. But don’t count out Recursion just yet. They’ve got a lot of potential in their pipeline, and their licensing and research segments haven’t even had a chance to shine.
So, here’s my advice. Both of these companies are risky investments, no doubt about it. They’ve got some elements of their business models that still need proving. But if you’re up for a gamble, why not buy shares of both? In a few years, they might just surprise us and become great investments. Only time will tell.
And on a side note, Suzanne Frey from Alphabet is on the board of directors for The Motley Fool. But let me make it clear, I am not Joe Rogan. Just wanted to put that out there. Stay tuned for more insights, folks. Peace out!