Why fund managers say Pro Medicus keeps disproving the AI disruption fear

Pro Medicus shares fell sharply on AI disruption fears, then recovered 74% in a quarter as customers kept renewing on longer terms and higher prices.

30 Jun 2026 · 7 min read

Medical imaging software company Pro Medicus moved from one of the market's most punished growth stories in early 2026 to one of its strongest recoveries by mid-year, as contract wins piled up despite persistent fears about AI disruption. LHC Capital's June 2026 Quarterly Report detailed an exceptionally strong quarter in which the company announced six Visage customer contracts with a combined minimum value of $210 million, comprising three new customers and three renewals, with shares rising 74.0% over the quarter even after remaining materially below the prior year's highs.

AI fears collide with a 100% renewal track record

The debate over AI's impact on Visage's radiology workflow platform ran through nearly every manager update across the first half of 2026. ELM Responsible Investments' March 2026 Monthly Report argued established platforms like Pro Medicus benefit from deeply embedded distribution that lets them roll out new AI capabilities quickly across large, sticky customer bases, generating proprietary clinical data that is not easily replicated and creating high switching costs in a regulated, high-stakes domain. LHC Capital's June 2026 report pointed to hard evidence from the latest renewal round: customers including Northwestern Medicine, Allegheny Health Network and Ohio State University Wexner Medical Center all renewed for a further five years despite AI uncertainty, agreeing to higher transaction prices and minimum volumes rather than shorter terms.

Nevertheless, the evidence from customer behaviour is increasingly difficult to reconcile with the market narrative that AI may make Visage obsolete. Customers are signing longer contracts, accepting higher prices, increasing minimum commitments and consolidating more of their imaging infrastructure onto the platform.

— LHC Capital, Quarterly Report, June 2026

The path to that recovery went through a sharp de-rating first. Solaris Investment Management's February 2026 Monthly Report described first-half results coming in below market expectations, with the stock predominantly reacting to concerns around AI disruption rather than the underlying shortfall, which analysts largely attributed to contract revenue timing. Several managers used the resulting weakness to build new positions: Phoenix Growth Fund initiated its first-ever position in January 2026, and added further in February on the view that companies with deeply embedded workflows and high switching costs are far more resilient to software disruption risk than the market was pricing in.

What managers are watching next

Hyperion Asset Management's June 2026 Monthly Report detailed the latest wave of deals, including a seven-year, $90 million contract with Beth Israel Lahey Health and a strategic investment in EchoIQ, comprising a $10 million convertible bond with an option for a further $10 million, alongside a heads of agreement making Visage a US reseller of EchoIQ's cardiac AI detection tools. ELM Responsible Investments' subsequent June 2026 Newsletter framed the Beth Israel Lahey Health win as reinforcing the ongoing standardisation of CloudPACS across major healthcare networks, with the company continuing to execute against a deep commercial pipeline even as its valuation multiple has come off its prior highs.