Newscasts - Portfolio manager sees long-term AI upside in healthcare sector

McKesson

11/07/2025 21:15

Click the following link to watch video: https://share.newscasts.refinitiv.com/link?entryId=1_glmn4vj2&referenceId=tag:reuters.com,2025:newsml_RW925411072025RP1_930&pageId=Newscasts
Source: 'Reuters - Business videos'

Description: Brian Krawez, president of Scharf Investments, says healthcare is "an industry that's insulated, generally speaking, from economic volatility," and could benefit from AI-driven drug development.

Short Link: https://refini.tv/44Yonpp

Video Transcript:

One sector we like is healthcare. That's a sector that's had some trouble recently as there's a number of policy changers and investors are rightfully worried about what that means for the sector in the short term. But longer term, we think demographics are definitely there for healthcare. It's an industry that's insulated, generally speaking, from economic volatility. It's an industry that's growing because of demographics. And also, when you're thinking about AI plays, one sort of sneaky AI play is within drug development, there could be a huge boom in productivity. And so, you've got pharma names like Novartis that are just sitting there at very low multiples. You've got a name like McKesson, which is very large in drug distribution, the largest drug distributor in the country. They're benefiting from more specialty drugs coming out and just more drugs in general coming out. But they're also insulated from some of the stuff that's going on in Washington because regardless of the policies that are coming out, we think there'll be continued usage of drugs as you get more and more innovation. And so, these kinds of companies are going to benefit from an increased innovation, which, you know, I think if AI does, one-tenth of what people think it'll do, healthcare will be a big beneficiary in terms of accelerating drug development, and yet healthcare has been a laggard and is one of the cheaper sectors out there.