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DGX Stock Set to Benefit From New Google Cloud Partnership

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Quest Diagnostics Inc. (DGX - Free Report) recently announced a collaboration with Google Cloud, owned by the parent holding company, Alphabet (GOOGL - Free Report) . The partnership aims to streamline Quest Diagnostics’ data management, improve data analytics, and personalize the experiences it delivers to patients, providers and other customers.

The company expects the relationship with Google to strengthen its hybrid cloud strategy by growing data and AI capabilities and improving productivity.

DGX Stock’s Likely Trend Following the News

After the announcement on March 18, DGX shares fell 0.6% to close the session at $172.45. On a promising note, the latest Google partnership builds on the company’s strategy to deploy AI and automation technologies to improve productivity, service, quality and innovation. Quest Diagnostics has successfully deployed AI and automation in several areas of its organization, including microbiology and cytology testing, specimen processing and customer service. Accordingly, we expect the latest development to positively boost market sentiment towards DGX stock.

Secaucus, NJ-based Quest Diagnostics has a market capitalization of $18.65 billion at present. Going by the Zacks Consensus Estimate, the company’s 2025 earnings are expected to grow by 8.6% on a 9.1% improvement in revenues. It delivered an earnings beat of 3.7%, on average, in the trailing four quarters.

More on Quest Diagnostics’ Latest Collaboration

As part of the collaboration, the company will use Google Cloud's data analytics and generative AI (gen AI) technologies, including Google Agentspace, a platform that uses gen AI to connect employees and customers with enterprise-wide knowledge and automate complex tasks through intelligent, customizable agents. This marks one of the first cases of a national laboratory provider using these technologies across a range of operations and administrative areas like R&D, customer experience and operations, with data privacy and security safeguards implemented.

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Additionally, the parties will also explore the use of gen AI in multiple areas, including improving patient engagement by helping patients and consumers glean personalized health insights from their laboratory data and empowering physicians with laboratory insights and other data to enhance care for the individual patient.

In 2024, Quest Diagnostics has fulfilled more than 200 million test requisitions (orders for tests) and managed over 80 billion data points. Access and use of patient data will be protected through the implementation of Google Cloud's HIPAA-compliant infrastructure and secure data storage, and Quest's security and privacy controls and processes.

Industry Prospects Favoring DGX

Per a Research report, the global AI data management market was valued at $25.5 billion in 2023 and is expected to grow at a compound annual rate of 22.7% through 2030. Some of the key factors driving the market’s growth are Big Data and the Internet of Things (IoT), rapid advancements in AI and Machine Learning, and increasing demand for data-driven decision-making.

More Developments in DGX

Last month, Quest Diagnostics announced that it will acquire select assets of Fresenius Medical Care’s wholly owned Spectra Laboratories under the terms of a definitive acquisition agreement. Through a separate agreement, the company will provide comprehensive laboratory services related to end-stage kidney disease (ESKD) and specialized water testing for patients and providers served by dialysis centers operated by Fresenius Medical Care and its wholly owned and joint-venture partners in the United States.

DGX Stock Price Performance

In the past year, shares of DGX have gained 29.2% compared with the industry’s growth of 5.1%.

DGX’s Zacks Rank and Key Picks

Quest Diagnostics currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Boston Scientific (BSX - Free Report) and Insulet (PODD - Free Report) . Each of these carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Boston Scientific shares have gained 50.3% in the past year. Estimates for the company’s 2025 earnings per share have jumped 2.9% to $2.85 in the past 30 days. BSX’s earnings beat estimates in each of the trailing four quarters, the average surprise being 8.3%. In the last reported quarter, it posted an earnings surprise of 7.7%.

Estimates for Insulet’s 2025 earnings per share have increased 9.9% to $4.31 in the past 30 days. Shares of the company have surged 59.3% in the past year compared with the industry’s 10.2% rise. PODD’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 27.5%. In the last reported quarter, it delivered an earnings surprise of 9.5%.

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