Pro Medicus' (ASX:PME) two recent contract awards in the US will help discredit fears of competitors in the artificial intelligence space eroding long-term demand, RBC Capital Markets said in a note, the Australian Financial Review reported Monday.
The company disclosed that US subsidiary Visage Imaging renewed its partnership with Allegheny Health Network through a five-year contract valued at around AU$28 million, and also signed a seven-year contract with TidalHealth valued at AU$16 million.
The contracts show that customers remain committed to longer term deals as opposed to shorter agreements that would maintain flexibility for AI-native alternatives, RBC analyst Jackson Lee said, according to the report.
The awards also add to traction seen in the company's cloud imaging platform and transaction-based revenue model, RBC reportedly said.
The investment firm kept a sector perform rating on Pro Medicus with a share price target of AU$195, AFR reported.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)