CEO Jeff Tangney said Doximity’s AI recorded a 4.8% error rate versus 13.6% for Anthropic’s Fable 5.
- CEO Jeff Tangney attributed Doximity’s performance over Anthropic to proprietary medical data and physician oversight.
- Canaccord and BMO Capital raised their price targets on Doximity, citing growing demand for the company’s AI products.
- Canaccord forecast that AI revenue would become a meaningful growth driver in the third quarter.
Shares of Doximity (DOCS) surged as much as over 200% in pre-market trade on Friday before paring most of the gains despite an earnings miss after CEO Jeff Tangney touted the company’s growing artificial intelligence capabilities and said that its clinical AI outperformed Anthropic’s latest model in physician-focused testing.
During the earnings call, Chief Executive Jeff Tangney said Doximity’s clinical AI recorded a 4.8% error rate, compared with 13.6% for what he called Anthropic’s “best model”, Fable 5.
Canaccord also raised its price target on DOCS stock to $36 from $30 and kept a ‘Buy’ rating on the shares, citing growing demand for Doximity’s AI products, especially from pharmaceutical companies. Meanwhile, BMO Capital raised its price target to $30 from $20 and kept a ‘Market Perform’ rating on the shares.
DOCS stock more than tripled at one point in pre-market trading before the rally cooled to about 100%, putting the shares on track to hit a six-month high. The stock was among the top trending tickers on Stocktwits, and on track to hit highs not seen since January.
If the gains hold above 40%, the rally would mark the biggest single-day gain in the stock’s history, surpassing the previous record of 38.74% set in August 2024.
Doximity Says Its AI Outperformed Anthropic
Tangney said Doximity’s performance advantage over Anthropic stemmed from two key differentiators. The first is a built-in, expert-verified drug reference system designed to improve dosing accuracy and drug interaction checks. The other is a network of more than 12,000 physician “PeerCheck” editors who continuously review and refine the platform’s AI-generated responses.
“We’re proving you can still post best-in-class software margins while investing heavily in clinical AI,” Tangney said. “We’re leaning in because we see a once-in-a-generation opportunity to build the new AI age of medicine.”
He added that AI represents “the next chapter” in Doximity’s growth strategy, building on its position as a digital platform for physicians.
Canaccord Sees AI Becoming A Major Growth Driver
The brokerage said AI revenue has yet to materially contribute to Doximity’s financial results but is already generating meaningful customer interest.
Analysts pointed to growing demand from pharmaceutical companies for Doximity’s AI tools, particularly search marketing capabilities within its “Ask” platform, which they said is driving engagement with clients.
Canaccord expects meaningful AI monetization to begin in the third quarter, with the segment becoming an increasingly important contributor to the company’s long-term growth.
BMO Capital echoed the view, stating AI Search traction and increased AI utilization support long-term monetization. However, the firm added that near-term margin pressure from higher compute costs may weigh on the balance sheet.
How Is Retail Feeling About DOCS Stock?
On Stocktwits, retail sentiment around DOCS stock improved to ‘extremely bullish’ from ‘bullish’ over the past day, while chatter rose to ‘extremely high’ from ‘high’ levels.
Many retail traders on the platform warned that the rally in DOCS might be a short squeeze in the making.
Not accounting for the pre-market rally, DOCS stock has dropped more than 50% this year and nearly 65% in the last 12 months.
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