This $4 Stock Could Be Your Ticket to Millionaire Status

What’s the best next use of artificial intelligence (AI)? Plenty of people would say drug development. And they’d arguably be right.

That’s not something for down the road, though, when AI is more refined. Recursion Pharmaceuticals (NASDAQ: RXRX) is doing it right now. Its platform called Recursion OS leverages 65 petabytes (65 million gigabytes) of chemical and biological information to virtually test a drug.

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Clinical trials that would normally take years and millions of dollars to complete can now be done with a fraction of both. Although the FDA still requires full-blown clinical testing, this virtual pretesting allows pharmaceutical companies to focus their limited resources on only their most promising prospects.

This isn’t mere theory or premise, either. Drugs that were pretested with Recursion OS are now in actual clinical trials. All told, Recursion’s current developmental pipeline consists of eight drugs, half of which are in trials with real patients.

Although Recursion is working on some of its own drugs, in most cases, pharma companies compensate Recursion for access to its technology. To this end, analysts expect the company’s top line to improve from last year’s anticipated $62 million to $83 million this year en route to $163 million in 2028 as R&D milestone payments from some of its partners start flowing more freely. Revenue from actual pharmaceutical sales remains further down the road.

There’s still risk here, to be sure. Profitability is even further away than drug sales, for instance, and there’s not necessarily much to prevent a bigger tech company from crossing the industry’s low barrier to entry to become a direct competitor.

In light of Straits Research’s belief that the AI-powered drug development industry is set to grow at an average annual pace of 30% between now and 2034, however, perhaps the earliest name in the business to create a solution of Recursion OS’s caliber is also the name to put at the top of your watch list.

Just keep in mind this is very much an all-or-nothing kind of trade, with a big potential upside, but a big potential downside as well.

Before you buy stock in Recursion Pharmaceuticals, consider this:

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James Brumley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

This $4 Stock Could Be Your Ticket to Millionaire Status was originally published by The Motley Fool