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Microsoft (MSFT) Reportedly Mulling to Buy Nuance for $16B

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Microsoft (MSFT - Free Report) is reportedly holding talks to acquire Nuance Communications (NUAN - Free Report) for nearly $16 billion, per various sources including a Bloomberg report. However, there has been no official word on the matter from either of the parties.

The acquisition of Nuance Communications will help Microsoft expand its presence in the multi-trillion healthcare vertical with innovative solutions.

Burlington, MA-based Nuance Communication specializes in offering innovative conversational Artificial Intelligence (AI) tools to boost business productivity. The company’s healthcare delivery offerings, including Nuance electronic health record (EHR) services, Dragon Medical Virtual Assistant, Dragon Ambient eXperience (DAX), Dragon Medical One are expected to witness continued traction amid the pandemic.

 

According to people familiar with the development, Bloomberg noted that Nuance’s shares could be valued at $56 apiece, representing a 23% premium to closing price of $45.58 on Apr 9, 2021. Shares of Nuan are up 23% in the premarket trading on Apr 12, 2021.

If talks are fruitful, the deal could be made official on Monday, making it the largest acquisition for Microsoft after LinkedIn acquisition (for $26.2 billion), added Bloomberg citing sources familiar with the matter.

AI In Healthcare Opportunity Bodes Well

Per Reports And Data research report, AI in healthcare is projected to witness a CAGR of 43.6% between 2020 and 2027 and reach $61.59 billion. The market is being driven by higher utilization of precision medicine as well as growing number of clinical trial processes and exponential growth in complex healthcare data, stated the report.

Further, virtual assistants unified with ambient clinical intelligence (ACI) technology are anticipated to witness healthy traction in the healthcare sector Healthcare virtual assistants’ market is expected to reach $1.7 billion in 2027 at a CAGR of 24.3% between 2020 and 2027, per data from FutureWise Research & Consulting.

Moreover, pandemic has led to a massive spurt in online health consultation due to the social distancing measures and movement restrictions. Per a Grand View Research report, worldwide telemedicine market is projected to witness a CAGR of 22.4% between 2021 and 2028, mainly due to the COVID-19 crisis.

We believe Microsoft’s acquisition of Nuance, which is one of the well-known solution providers in the healthcare virtual assistants market owing to the ACI technology, strengthens its prospects in the healthcare domain.

Microsoft and Nuance already have a collaboration in place to innovate conversational AI and ambient intelligence technologies to augment physician-patient interaction. Both the companies are concentrating on enhancing healthcare delivery by transforming Nuance’s ACI technology.

Microsoft is utilizing Azure cloud platform’s AI capabilities along with EmpowerMD services to bolster Nuance's healthcare-optimized and ambient intelligence technology powered solutions.

In September 2020, Microsoft integrated its Teams App workflows with Nuance DAX solution. The integration will facilitate a seamless physician-patient conversation. Notably, DAX is built on Microsoft’s Azure along with Nuance’s Dragon Medical platform.

Zacks Rank & Stocks to Consider

Microsoft currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader sector are Etsy (ETSY - Free Report) and Vishay Intertechnology (VSH - Free Report) . Both the stocks flaunt a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Etsy and Vishay is currently pegged at 25.3% and 20.3%, respectively.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>