In this article, we will look at the 10 Best Cancer Stocks to Buy According to Hedge Funds.
Overview of the Global Oncology Sector
Cancer is the second leading cause of death across the globe, second to cardiovascular disease. According to data by the American Cancer Society released in January 2023, the United States was expected to have around 1,958,310 cancer patients by the end of 2023 alone. This reflects a 28% increase from 2010. More than 2 million new cases of cancer were likely to be diagnosed in the US in 2024, with more than 600,000 deaths from the ailment expected in the same year. Like the increasing number of cancer patients, the cost of treating cancer is on an upward trajectory as well. While it cost around $200 billion to treat cancer in the US in 2020, the total expense is anticipated to exceed $245 billion by 2030.
According to the “Oncology Pharmaceuticals Market 2024” report, global funding for cancer research has grown exponentially over the past two decades. The FDA approved 161 new cancer therapies between 2017 and 2022, which reflects the fast pace with which treatment in the field is advancing. These statistics make oncology one of the most comprehensive sectors of the life science space. The oncology sector covers the entire cancer care process, from diagnosis to treatment.
Pharmaceutical and biotech companies around the world are continuously striving to develop more effective cancer treatments. According to Fortune Business Insights, this endeavor is expected to continue increasing in magnitude in the coming future. The global oncology drugs market was valued at around $201.75 billion in 2023. It is anticipated to grow at a compound annual growth rate (CAGR) of 11.3%, going from $220.80 billion in 2024 to $518.25 billion by 2032.
Some of the primary factors driving the growth of the oncology drugs market include the advancements in targeted immunotherapies for cancer care and the increasing prevalence of cancer across the globe. This growth rate makes investment in oncology-related companies a lucrative bet. North America is the most dominant geographical region in the global oncology drugs market. It held a 45.92% market share in 2023.
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Trends in Precision Oncology
The precision oncology market reflects similar trends. The National Institutes of Health (NIH) defines precision oncology as a form of treatment where medical professionals choose treatments by keeping the DNA signature of an individual patient’s tumor in view. Statistics from Grand View Research show that the global precision oncology market size was valued at $115.8 billion in 2024.
It is anticipated to grow at a CAGR of 8.05% between 2025 and 2030. This growth is attributed to the increasing demand for diagnostics products, technological advances, avoiding particular drug resistance, and the increasing minimizing of the side effects of therapies in cancer patients.
AI and Cancer: What’s the Connection?
The adoption of AI in the oncology sector is increasing dramatically. According to a report by Mordor Intelligence, the AI in oncology market size is expected to be around $1.98 billion in 2025, and is anticipated to reach around $9.04 billion by 2030. This reflects growth at a CAGR of 35.51% between 2025 and 2030.
The increasing adoption of AI to diagnose, analyze, and treat complex datasets related to oncology is helping reduce the burden on physicians and hospital infrastructure, streamlining the process. While the largest market for AI in oncology is North America, the fastest-growing sector market is the Asia-Pacific region.
With these trends in view, let’s look at the 10 best cancer stocks to buy according to hedge funds.
A closeup of pills in a pharmacy, representing the high quality medications of the company.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 30 cancer stocks. We then selected the top 10 stocks most popular among elite hedge funds. We sourced hedge fund data from Insider Monkey’s database. The stocks are sorted in ascending order of the number of hedge fund holders that have stakes in them as of Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Cancer Stocks to Buy According to Hedge Funds
10. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Number of Hedge Fund Holders: 62
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is a pharmaceutical company that develops, discovers, and commercializes therapies for a number of diseases, including cancer, eye disorders, and allergic conditions. The company is advancing around 40 of its programs. It has relied on two primary products to drive top-line growth in the past years: Dupixent and Eylea. Dupixent is an eczema treatment whose rights Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) shares with Sanofi. Eylea, which Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) comarkets with Bayer, treats wet age-related macular generation.
While the company’s products are under pressure due to competition, analysts believe Regeneron Pharmaceuticals, Inc.’s (NASDAQ:REGN) stock could grow by 50% from its current levels in the next year. Dupixent is expected to continue being a growth driver for the company, as its total global revenue increased by 23% year over year to $3.82 billion in fiscal Q3 2024.
Dupixent also attained FDA’s approval to treat Chronic Obstructive Pulmonary Disease (COPD) in September, indicating that it may add several billion dollars in annual sales in the coming years. In addition, the company’s cancer medicine Libtayo brought in $289 million in sales in fiscal Q3 2024, up 24% compared to the year-ago period. This drug is also anticipated to maintain strong growth for the company in the coming years. It ranks tenth on our list.
9. Abbott Laboratories (NYSE:ABT)
Number of Hedge Fund Holders: 63
Abbott Laboratories (NYSE:ABT) discovers, develops, manufactures, and sells healthcare products. Its business segments include Diagnostic Products, Established Pharmaceutical Products, Medical Devices, and Nutritional Products. The company’s Abbott Molecular is a leader in oncology molecular diagnostics with its Vysis FISH assays.
Abbott Laboratories (NYSE:ABT) offers an array of assays to assist in the diagnosis, risk stratification, and management of various kinds of cancers. Its 300-plus Vysis DNA FISH probes are specially designed for breast, hematology, bladder, lung, and other solid tumors. The company generated $8.5 billion in operating cash flow in fiscal Q4 2024, which it used to reinvest in its business by repaying debts, funding capacity expansions, and returning $5 billion to shareholders through share repurchases and dividends.
Its innovative abilities, diversified business, and expertise in the industry give Abbott Laboratories (NYSE:ABT) a competitive market edge, allowing it to perform well in the long run. It is well positioned to deliver strong growth in fiscal 2025, and forecasts organic sales growth in the 7.5% to 8.5% range. Abbott Laboratories (NYSE:ABT) ranks ninth on our list of the 10 best cancer stocks to buy according to hedge funds.
8. Amgen, Inc. (NASDAQ:AMGN)
Number of Hedge Fund Holders: 68
Amgen, Inc. (NASDAQ:AMGN) is a biotechnology company that discovers, develops, manufactures, and markets human therapeutics. It delivers new therapies for patients with complex cancers, especially in areas with significant unmet needs. Amgen, Inc. (NASDAQ:AMGN) reported a 23% revenue increase in fiscal Q3 2024, reaching $8.5 billion. This growth was driven by double-digital growth across several of the company’s products.
It underwent a 17% growth in oncology sales, a 21% increase in rare disease sales, and a 67% growth in TEZSPIRE, which treats severe asthma. Its pipeline progress, especially its obesity drug MariTide, positions Amgen, Inc. (NASDAQ:AMGN) for long-term growth.
The company’s move towards rare diseases exhibited strong momentum in late fiscal 2024. The sale of its breakthrough treatments is also yielding positive results, like the cholesterol-lowering medication Repatha, which grew 40% relative to the same period a year ago. Analysts are bullish on the stock as its October 2023 acquisition of Horizon Therapeutics is expected to pay off in the next five years.
PGIM Jennison Health Sciences Fund stated the following regarding Amgen, Inc. (NASDAQ:AMGN) in its Q2 2024 investor letter:
“Amgen Inc. (NASDAQ:AMGN) is a large-cap global biotech company with a diverse portfolio of marketed and pipeline products. Amgen’s discovery pipeline had led the company to broaden its focus from oncology, immunology, and renal disease to include musculoskeletal, cardiovascular, and neurologic conditions. In addition, Amgen has turned its expertise in antibody manufacturing into a leading position in the development of biosimilars of competitor drugs. Most recently, Amgen shares advanced in 2Q following its announcement that its novel injectable GLP-1 agonist / GIPR antagonist, MariTide, for obesity showed promising interim Phase 2 data and has shown enough promise to warrant advancement into pivotal trials as soon as late 2024. While Eli Lilly and Novo Nordisk will remain the market leaders in the diabetes / obesity space, we think there is room for Amgen to carve out a meaningful share of the market with its antibody-peptide conjugate approach that could enable monthly or better dosing for MariTide.”
7. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 68
AbbVie Inc. (NYSE:ABBV) is a research-based pharmaceutical company that develops and sells products to treat chronic diseases in oncology, gastroenterology, rheumatology, dermatology, virology, and various other serious health conditions.
The company generated $15.1 billion in revenue in fiscal Q4 2024, reflecting a 5.6% growth and exceeding analyst expectations. This growth was attributed to its ex-Humira platform, a drug collection in the company’s pharmaceutical portfolio. The platform delivered more than 18% full-year sales growth, with revenue growth accelerating to 22% in fiscal Q4 2024.
Analysts are optimistic about AbbVie Inc.’s (NYSE:ABBV) future growth, primarily because of its two blockbuster drugs: Skyrizi and Rinvoq. These drugs are projected to exceed $27 billion in annual sales by 2027, targeting dermatology, rheumatology, psoriatic diseases, and inflammatory bowel disorders. The company also announced a dividend increase of 5.8%, effective February 2025, continuing its trend of increasing dividends for 12 consecutive years.
Polaris Capital Management said the following about AbbVie Inc. (NYSE:ABBV) in its Q3 2024 investor letter:
“US biopharma/biotech companies topped the health care sector, with the majority of holdings posting returns in excess of 10%. AbbVie Inc. (NYSE:ABBV) showed positive top-line growth from its immunosuppressive drugs, Skyrizi and Rinvoq. Abbvie’s management continues to work through the loss of exclusivity from Humira, switching patients to Skyrizi or Rinvoq rather than Humira biosimilars.”
6. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 80
Pfizer Inc. (NYSE:PFE) is a global biopharmaceutical company that manufactures, develops, markets and sells biopharmaceutical products worldwide. It advances wellness, prevention, treatment, and cures in developing and emerging markets. The company’s goal is to become a world-class oncology leader. It is already the third-largest biopharma company in oncology in the United States and has plans to continue its progress in oncology for the rest of the decade.
It used a significant portion of its pandemic profits on the $43 billion acquisition of Seagen, a biotech company specializing in oncology. Pfizer Inc. (NYSE:PFE) has a strong focus on its oncology pipeline for future growth, with its 2030 goals entailing the addition of several new blockbuster drugs to its portfolio. The company is expected to continue looking for opportunities to acquire promising pharmaceutical companies to augment its pipeline further. This strategy is working well for Pfizer Inc. (NYSE:PFE) as management estimates earnings growth between 10% and 18% for 2025. Analysts also estimate the company’s earnings to grow by around 14% annually over the next 3-5 years.
Furthermore, Pfizer Inc. (NYSE:PFE) has an attractive dividend yield of 6.3%, higher than most blue-chip stocks. Its management has reiterated plans to support and raise this dividend periodically, recently announcing a 2.4% increase in early December. The company ranks sixth on our list of the 10 best cancer stocks to buy according to hedge funds.
Diamond Hill Select Strategy stated the following regarding Pfizer Inc. (NYSE:PFE) in its first quarter 2024 investor letter:
“Though valuations have increased, we continue identifying high-quality companies we believe the market is overlooking. Thus, we initiated new positions in Q1: Pfizer Inc. (NYSE:PFE). Biopharmaceutical company Pfizer is a leading global pharmaceuticals company that benefited during the pandemic from COVID vaccine and treatment sales, which provided significant excess earnings above the company’s normalized earnings power. Although the resulting influx of incremental cash allowed Pfizer to complete several acquisitions, the company has struggled to return to its pre-pandemic profitability as COVID-related sales have declined. In late 2023, Pfizer started focusing on cost-cutting and aiming to increase its operating margin significantly over the next few years. The base (non-COVID-related) business continues performing well, and given the outlook from here, we took advantage of what we consider an attractive, depressed valuation to initiate a position during the quarter.”
5. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 81
Johnson & Johnson (NYSE:JNJ) develops, manufactures, and sells a range of products in the healthcare field through its subsidiaries. With a primary focus on products related to human well-being and health, the company operates through two segments: Innovative Medicine and MedTech. The Innovative Medicine segment focuses on various therapeutic areas, including oncology, infectious diseases, immunology, cardiovascular and metabolic diseases, and others. Johnson & Johnson (NYSE:JNJ) is running on solid fundamentals. It has a AAA credit rating, higher than that of the US government. One of the primary reasons behind this position is its low debt level.
Fiscal Q4 2024 showed strong sales of the company’s cancer treatments. Johnson & Johnson (NYSE:JNJ) reported sales of $88.8 billion for fiscal year 2024, reflecting a 4.3% year-over-year growth. These strong results reflect the strength of the company’s high-growth strategy. It has a solid balance sheet and generates enough cash flow through its operations to cover its high-yielding dividend.
Johnson & Johnson (NYSE:JNJ) also announced the $14.6 billion acquisition of neurological drugmaker IntraCellular on January 13. This acquisition will allow the company access to Caplyta, an oral drug for the treatment of bipolar disorder and schizophrenia. This acquisition is part of the company’s various acquisition plans to drive growth in fiscal 2025 and beyond.
4. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 86
Merck & Co., Inc. (NYSE:MRK) is a biopharmaceutical company that delivers health solutions that prevent and treat diseases in humans and animals. Its Pharmaceutical segment provides human vaccines and pharmaceutical products consisting of therapeutic and preventive agents. The company boasts over a decade of progress in cancer care and has three primary areas of focus in oncology research: immuno-oncology, tissue targeting, and precision molecular targeting.
Merck & Co., Inc.’s (NYSE:MRK) cancer immunotherapy drug Keytruda has been its most significant revenue driver over the past few years. It is on the path to reaching $30 billion in sales by 2026 and is seeing growth due to its use for additional cancer types and improved patient demand.
The drug is presently approved for different oncology indications in the US, and the company is in the process of seeking approval for most of the indications in other major international markets as well, such as Japan and the EU. Merck & Co., Inc. (NYSE:MRK) takes the fourth spot on our list of the 10 best cancer stocks to buy according to hedge funds.
GreensKeeper Asset Management, an investment management company, released its third-quarter investor letter. Here is what the fund said:
“Merck & Co., Inc. (NYSE:MRK) was our second-largest detractor this quarter, declining -8.3%. MRK’s leading HPV vaccine, GARDASIL 9, faced challenges internationally due to inventory buildup within its Chinese distributor, which is expected to reduce shipments for the remainder of 2024. Despite this short-term impact, the long-term outlook for GARDASIL 9 remains promising. Meanwhile, the company’s $27 billion Keytruda cancer juggernaut continues to grow at a healthy clip, powering earnings growth.”
3. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 98
Thermo Fisher Scientific Inc. (NYSE:TMO) provides analytical instruments, reagents, equipment, software, and other services for analysis, research, diagnostics, and discovery. It operates through the Analytical Instruments, Life Sciences Solutions, Laboratory Products and Services, and Specialty Diagnostics segments. It offers multiple solutions to diagnose and predict cancer.
The company is on a solid growth trajectory. It reported $11.4 billion in revenue in fiscal Q4 2024, reflecting a 5% year-over-year growth. Thermo Fisher Scientific Inc. (NYSE:TMO) holds a competitive market position due to its leadership in life sciences, long-term customer relationships, and high switching expenses. Its consumables and equipment are especially useful in drug development.
It also has a strong dividend yield, with seven consecutive years of growth. The company outperformed the sector median of two years by 250%, reflecting its ability to return value to its shareholders. Thermo Fisher Scientific Inc. (NYSE:TMO) expects to continue its consistent growth, and management forecasts high-single-digit revenue growth in the coming years. The company’s strong cash position further bolsters its standing, as it generated over $7.3 billion in free cash flow in fiscal 2024.
2. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 98
Danaher Corporation (NYSE:DHR) designs, manufactures, and markets professional, industrial, medical, and commercial products and services. It operates through Diagnostics, Biotechnology, Life Sciences, and Environmental and Applied Solutions. The company offers various services in the oncology sector, including gynecology, hematology, radiation, and urology oncology.
The company generated $5.3 billion of free cash flow in fiscal 2024, which resulted in a free cash flow to net income conversion ratio of around 135%. This makes strong free cash flow generation a competitive point for the company. Danaher Corporation (NYSE:DHR) is also active in the M&A domain, completing several strategic acquisitions throughout fiscal 2024 that brought innovative solutions to the company.
Danaher Corporation’s (NYSE:DHR) focus on high-margin bioprocessing in its life sciences sector is another central force in its growth strategy. The anticipated recovery in bioprocessing is expected to significantly increase earnings per share (EPS) for the company in the coming years. The company takes the second spot on our list of the 10 best cancer stocks to buy according to hedge funds.
1. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 106
Eli Lilly & Co. (NYSE:LLY) develops, manufactures, discovers, and sells pharmaceutical products. Its products span oncology, diabetes, immunology, neuroscience, and other therapies. The company is one of the best stocks to buy in the pharmaceutical industry, and management expects a 32% revenue growth in fiscal 2025.
It has a solid oncology segment, weight loss therapies, and medications approved for eczema and Alzheimer’s disease that are anticipated to improve the company’s fundamentals. In fiscal Q3 2024, the company grew its sales by 20% to $11.4 billion. Several of its products generated more than $1 billion in revenue, including Zepbound ($1.3 billion) and Mounjaro ($3.1 billion), its top GLP-1 drugs. Strong US demand for these two drugs caused a 42% surge in the company’s revenue in fiscal Q3 2024.
Investors are thus bullish on Eli Lilly & Co. (NYSE:LLY) due to its in-demand GLP-1 drugs, which are still in their early growth stages, and the company’s strong financials. Zepbound was approved as a treatment for moderate to severe sleep apnea last year, which is a significant milestone for the company and is expected to be a catalyst for more revenue growth for Eli Lilly & Co. (NYSE:LLY) in the near future.
Overall, LLY ranks first among the 10 best cancer stocks to buy according to hedge funds. While we acknowledge the potential of cancer stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LLY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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