This year the National Institutes of Health is set to request its biggest budget yet for 2024, on the heels of its previous biggest budget in 2023. As the COVID-19 pandemic fades from view, labs will switch back to other avenues of research, often funded by the NIH. This higher level of funding, coming on the heels of the COVID-19 pandemic and associated biotech boom, could be big money for the people who make and sell equipment. As the saying goes, in a gold rush, the best job is a shovel salesman.

University labs are the biggest beneficiaries of NIH funding. These groups tend to be smaller than corporate labs and have less time to compare every product line when purchasing. Therefore, they tend to purchase from large, trusted companies above all else.

I will be discussing three companies that are well-known by researchers, making them some of the most likely beneficiaries of the NIH’s largesse. Ultimately, these three companies have positioned themselves well as some of the most promising biotech stocks to buy in 2023.

Most Promising Biotech Stocks: Qiagen (QGEN)

Many researchers best know Qiagen (NYSE:QGEN) for its long line of consumable products. From simple DNA extraction kits to more high-end products, most biochemistry labs use Qiagen for at least some of their work. Their trusted brand means they’ll be one of the first companies most researchers turn to with their new funding.

Qiagen’s consumables tend to be simple and easy to use. That makes them perfect for University labs often staffed by students new to research. Their broad array of products also makes money in just about every area of the biotech sector. No matter what a lab is doing, there is often a Qiagen product that can help them.

Qiagen’s Q4 2022 earnings showed $498 million in net sales. That’s down from $582 million in 2021, but that was due to a drop in COVID-related products. Non-COVID products have continued to grow and are expected to pick up the slack as the COVID pandemic ends. Furthermore, Qiagen sales were impacted by the strong dollar and an unfavorable exchange rate. As other nations raise rates to tame inflation, the dollar exchange should be much more favorable to Qiagen.

Ultimately, Qiagen has the mindshare among University labs, making it a good bet for investors as NIH funding continues to grow.

Bio-Rad (BIO)

Bio-Rad (NYSE:BIO) is the oldest company on this most promising biotech stocks list, founded in 1952 by a husband and wife team of Berkeley graduates. But despite its age, Bio-Rad has stayed ahead of the game through a long history of acquisitions. Because of this, it has consistently brought the latest and greatest technologies to add to its lineup.

Researchers of every level know Bio-Rad for its molecular diagnostic products, both durables, and consumables. Durables are big-ticket items that need a service contract to be maintained. Consumables need to be purchased every time you run an experiment. Bio-Rad’s clever business model also ensures a steady revenue stream from every lab using its products.

Bio-Rad has positioned itself well to take advantage of increasing Biotech funding. Although it reported a slight decrease in revenue for 2022, like Qiagen, the strong dollar impacted it. In currency-neutral terms, revenue increases. That means good news for 2023 as other countries strengthen their currencies.

The bottom line is that Bio-Rad is a company used by almost every American lab with NIH funding. It offers products for nearly every major molecular biology, biochemistry, and biotechnology application. Its deep roots in the scientific community make it the first stop for many labs with funding. And its business model ensures consistent revenue year after year.

Bruker (BRKR)

Bruker (NASDAQ:BRKR) is a high-end seller of biotech equipment and services. It offers products on the cutting edge of modern research. Mass spectrometry, spectroscopy, NMR, X-ray diffraction, and many of the best techniques are available on Bruker machines.

Increased NIH funding means more labs can move into the highly specialized research areas Bruker supports. It offers the machines and techniques needed for modern, high-quality proteomics research. There’s a truism in biochemistry that “you are what your proteins are.” That means proteins must be studied to understand modern diseases and how to treat them.

Unlike other biotech companies, Bruker experienced very few headwinds from the decline of COVID-19. Its 2022 report shows revenue continuing to increase from 2021 and good earnings of $2.00 per share. That gives it a relatively high price-to-earnings ratio in the mid-30s at the time of writing. But with 10% year-over-year earnings growth expected to continue, that P/E will seem reasonable to many investors.

Ultimately, Bruker is a bet on the “high tech” of biotech. If you believe researchers will need an ever-expanding suite of tools to cure our diseases, Bruker is there. And if you believe NIH funding will allow for more big-ticket purchases by research labs, Bruker is a safe bet.

On the date of publication, John Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.