In this article, we will look at the 10 Best Medical Device Stocks To Buy According to Hedge Funds.
Overview of the Medical Devices Sector
According to a report by Mordor Intelligence, the medical devices market has a size of $681.57 billion as of 2025. The massive industry is expected to grow at a compound annual growth rate of 6.99% between 2025 and 2030, reaching a market size of $955.49 billion by the end of the forecast period.
This significant growth can be attributed to various megatrends in the healthcare sector. The aging population worldwide is one of the primary factors affecting the industry. This is especially true in high-income countries such as the US, as around 17% of the country’s population is 65 or older as of 2023. This is causing an increase in the prevalence of chronic diseases, which is ultimately driving the demand for medical devices.
This demand is anticipated to continue growing in the coming decades. According to statistics by the United Nations, the number of people aged 65 or older is anticipated to represent around 16% of the world’s population by 2050, which translates to around 1.5 billion people worldwide. This demographic shift is anticipated to materialize especially prominently in regions such as Europe and North America, where the population of 65 or older is expected to reach 26.9% by 2050.
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Continued Growth in the US Medical Device Manufacturing Sector
In addition, technological advancements such as the increasing use of AI, predictive analysis, and advanced algorithms are metamorphosing the healthcare technology industry. While North America is the largest medical device market, Asia-Pacific is the fastest growing.
Another report by Grand View Research estimates that the market size of medical device manufacturers in the US is around $256.2 billion as of 2024. It is expected to grow at a compound annual growth rate of 5.9% between 2025 and 2030. The primary reasons behind this growth include the increasing geriatric population, the growing number of road and sports accidents, the expanding geographic reach of the key players in the market, and the rising adoption of minimally invasive procedures in the industry.
The Future of the Healthcare Industry in the US
According to McKinsey, the healthcare industry is expected to continually undergo a shift in growth dynamics. Health services and technology (HST) revenue pools are anticipated to grow at a compound annual growth rate of 8% between 2023 and 2028, supported by double-digit growth in software platforms and advanced data and analytics. The sales of innovative technologies such as generative AI to payers and providers are further supporting this growth.
In addition, pharmacy services, especially those focused on specialty pharmacy, are expected to see continued growth. The launch of new therapies and increased utilization are expected to be the primary drivers of this growth. McKinsey estimates specialty pharmacy revenue will grow at a compound annual growth rate of 8% between 2023 and 2028, growing EBITDA for managed service providers and specialty pharmacies.
Therefore, optimistic trends are materializing for the healthcare industry as a whole, including the medical device sector. With these trends in view, let’s look at the 10 best medical device stocks to buy according to hedge funds.
A close-up of a medical device prototype, featuring the latest innovations in the industry.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 20 medical device stocks. We then selected the top 10 most popular stocks among elite hedge funds as of Q3 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund sentiment.
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 Medical Device Stocks To Buy According to Hedge Funds
10. DexCom, Inc. (NASDAQ:DXCM)
Number of Hedge Fund Holders: 55
DexCom, Inc. (NASDAQ:DXCM) is a medical device company that manufactures continuous glucose monitoring (CGM) systems to allow real-time health management control. Specializing in diabetes care technology, the company helps improve and simplify diabetes management worldwide. It offers various medical devices and products, including Dexcom G6, Dexcom G7, Dexcom Stelo, Dexcom Share, Dexcom Real-Time API, and Dexcom ONE.
DexCom, Inc. (NASDAQ:DXCM) is one of the best medical device stocks for growth-oriented investors and is expected to outperform the market in the coming years. It boasts an expanded product portfolio and launched Stelo in the United States last year. Stelo is an over-the-counter CGM option for use by pre-diabetic patients. The launch has significantly expanded the company’s scope, as approximately 33% of adults in the US are pre-diabetic, according to the US Centers for Disease Control and Prevention.
Furthermore, DexCom, Inc.’s (NASDAQ:DXCM) devices are compatible with several third-party gadgets and apps that help combat diabetes. The company’s expanding base thus gives it a competitive market advantage in the CGM industry. The company’s guidance for 2025 shows a 14% year-over-year revenue growth. It ranks tenth on our list.
9. Stryker Corporation (NYSE:SYK)
Number of Hedge Fund Holders: 55
Stryker Corporation (NYSE:SYK) is a medical technology company that offers products and services in Neurotechnology, Medical and Surgical, and Orthopedics and Spine. It operates through the MedSurg and Neurotechnology and the Orthopedics and Spine segments. The company’s medical devices and products include surgical navigation systems, surgical equipment, emergency medical equipment, endoscopic and communications systems, neurosurgical and neurovascular devices, Mako Robotic-Arm Assisted technology, and several other products. Stryker Corporation (NYSE:SYK) holds around 13,000 global patents to shield its products from replication.
Historically, the company’s annual sales have never dropped by more than 6%, even as far back as 1984. It also has a streak of paying and raising its dividends for 31 consecutive years. The demand for Stryker Corporation’s (NYSE:SYK) Mako robotic-assisted surgery systems is continually increasing, with record installations in the U.S. and globally during fiscal Q4 2024.
The company also reported 10% year-over-year organic sales growth for both fiscal Q4 2024 and the full-year 2024, along with a 16% year-over-year increase in adjusted EPS in fiscal Q4 2024. It completed seven acquisitions in 2024, strengthening its market position. Stryker Corporation (NYSE:SYK) expanded its presence in the fast-growing peripheral vascular market by acquiring Inari Medical. The company is thus one of the best medical device stocks, and takes the ninth spot on our list.
Parnassus Core Equity Fund stated the following regarding Stryker Corporation (NYSE:SYK) in its Q3 2024 investor letter:
“We view Stryker Corporation (NYSE:SYK) as a best-in-class medical technology provider. It is a leader in most of its end markets and has a broad product offering, which has helped it achieve significant revenue and market share growth compared to its competitors. Stryker is particularly dominant in orthopedics, and we are optimistic about upcoming product launches, including the expansion of its Mako robotic-assisted surgery arm. The company also has one of the top industry CEOs with a strong track record of leading successful innovations and mergers and acquisitions to help the company grow.”
8. Edwards Lifesciences Corporation (NYSE:EW)
Number of Hedge Fund Holders: 55
Edwards Lifesciences Corporation (NYSE:EW) develops medical innovations for heart disease and critical care monitoring. Its products are categorized into four primary areas: Transcatheter Aortic Valve Replacement, Transcatheter Mitral and Tricuspid Therapies, Surgical Structural Heart, and Critical Care.
The company is considered a leader in the MedTech space due to its health value solutions and strong market position. Its stock has grown at a compound annual growth rate of around 16% over the past two decades. Although Edwards Lifesciences Corporation (NYSE:EW) has faced some headwinds in its recent transitional period, it is well-positioned for long-term growth. It has more than tripled its revenue and operating income over the last 12 years and has maintained operating margins over 25%. These historical trends reflect its strong business model.
Edwards Lifesciences Corporation (NYSE:EW) holds around 50% market share in the $7 billion transcatheter aortic valve replacement (TAVR) market. Its products in the sector are responsible for approximately 75% of the company’s revenue. Its focus on innovative solutions and products for structural heart disease thus lends it a competitive market advantage. The company ranks eighth on our list of the best medical device stocks to buy according to hedge funds.
Wedgewood Partners stated the following regarding Edwards Lifesciences Corporation (NYSE:EW) in its Q4 2024 investor letter:
“Edwards Lifesciences Corporation (NYSE:EW) was a contributor to quarterly performance but only slightly impacted annual portfolio performance. As we noted earlier this year, the Company’s flagship transcatheter aortic valve replacement (TAVR) franchise slowed as compared to the Company’s recent history. While the TAVR market is maturing, it is still far from saturated, as recent clinical trial results demonstrated. Many aortic stenosis patients prior to seeking TAVR treatment exhibit adverse symptoms, often prompting them to get the help of a doctor in the 7irst place. However, there is a large population afflicted with aortic stenosis that does not exhibit symptoms, which are monitored rather than treated with TAVR. Edwards presented data from its EARLY TAVR trial that showed 45 percent of untreated asymptomatic aortic stenosis exhibited no symptoms, still ended up dying, suffered a stroke, or were hospitalized for cardiac events compared to only 26 percent that had been treated with TAVR. The standard of care for a disease such as cancer is immediate intervention rather than waiting for symptoms to worsen. The EARLY trial could help position aortic stenosis treatment on a similar clinical footing as cancer treatment. Although this is just one study, it adds to the substantial body of knowledge that Edwards has created through its R&D investments, emphasizing how important their treatments are for patients. Edwards is well positioned for double-digit earnings growth over the next several years as they expand its structural heart franchise into new populations and indications.”
7. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Holders: 60
Medtronic plc (NYSE:MDT) is a medical technology company that manufactures, distributes, and sells device-based medical services and therapies. It operates under four primary segments: Cardiovascular Portfolio, Neuroscience Portfolio, Medical Surgical Portfolio, and Diabetes Operating Unit.
The company is increasingly benefitting from its diversified operating portfolio. It is expanding its AI capabilities, integrating automation and machine learning in several of its product offerings. For instance, Medtronic plc (NYSE:MDT) has revolutionized colonoscopy procedures through its GI Genius intelligent endoscopy module, which is equipped with AI-powered polyp detection. The company’s Aible robotic surgery ecosystem in the surgical domain and the new MiniMed 780G insulin pump system in the competitive diabetes care sector are more examples.
Such innovative AI-enabled technological advancements are anticipated to expand Medtronic plc’s (NYSE:MDT) market share and position it for continued success. The effects of these advancements are already visible in the company’s operations: its fiscal Q2 2025 results showed a 5.3% year-over-year revenue growth, along with an 8% increase in earnings per share (EPS).
Matrix Asset Advisors stated the following regarding Medtronic plc (NYSE:MDT) in its Q3 2024 investor letter:
“In Q3, we added to two Healthcare positions, Medtronic plc (NYSE:MDT) and Becton Dickinson (BD). Both companies are very attractive in our valuation analysis. We started the LCV position in MDT in the second quarter and added to it as more cash became available. The company’s business results have improved this year as the number of medical procedures normalized from their decline during the pandemic.”
6. 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 Medical Devices, Diagnostic Products, Established Pharmaceutical Products, and Nutritional Products. Its Medical Devices segment manages the global sales of heart failure, rhythm management, structural heart, electrophysiology, neuromodulation, and diabetes care products.
Abbott Laboratories’s (NYSE:ABT) innovative abilities, diversified business, and industry expertise lend it a competitive market edge. In fiscal Q4 2024, the company generated $8.5 billion in operating cash flow, 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.
The company’s main business highlights several growth opportunities. Its FreeStyle Libre franchise in the diabetes care unit, which comprises a range of continuous glucose monitoring (CGM) systems, has been one of the most significant growth drivers for the company and holds the potential to expand its market share. The company’s cardiovascular devices, which include its structural heart portfolio, are also expected to drive long-term growth as the global population ages.
Abbott Laboratories (NYSE:ABT) is well positioned to deliver strong growth in fiscal 2025 and forecasts organic sales growth in the 7.5% to 8.5% range. The company ranks sixth on our list of the best medical device stocks to buy.
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 MedTech segment includes an elaborate range of medical devices and products used in cardiovascular intervention, orthopedic, interventional solutions, surgery, and vision fields. Johnson & Johnson (NYSE:JNJ) also offers a commercially available intravascular lithotripsy (IVL) platform through its MedTech segment for peripheral artery disease (PAD) and coronary artery disease (CAD).
The company has solid fundamentals and a AAA credit rating, higher than the US government’s. Its elaborate portfolio features over 10 blockbuster drugs and a number of therapeutic domains, ranging from oncology to infectious diseases. Its medical device manufacturing segment further diversifies its operations. 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 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.
On January 13, Johnson & Johnson (NYSE:JNJ) announced the $14.6 billion acquisition of neurological drugmaker IntraCellular. This acquisition will allow the company access to Caplyta, an oral drug for the treatment of bipolar disorder and schizophrenia. Johnson & Johnson (NYSE:JNJ) has various other growth opportunities as well, such as the robotic-assisted surgery industry. It is developing the Ottava system to compete in the sector, which is expected to drive further growth for the company after its approval.
4. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Holders: 82
Intuitive Surgical, Inc. (NASDAQ:ISRG) has an elaborate ecosystem of services and products that provides robotic-assisted surgical solutions and invasive care. Its products include the Ion Endoluminal and the Da Vinci Surgical systems. In 2024, Intuitive Surgical, Inc. (NASDAQ:ISRG) expanded its installed system base to 9,902, reflecting a 15% growth. It also grew its number of performed procedures by 17%, showing its technology’s global adoption.
Its fiscal Q4 2024 results also showed considerable growth, with Da Vinci procedures increasing by 18%. Overall revenue also increased by 25% to $2.41 billion, beating the consensus of $2.24 billion. Intuitive Surgical, Inc. (NASDAQ:ISRG) holds a significant position in the surgical robotics market. According to Grand View Research, the surgical robotics market is expected to grow at a compound annual growth rate of 9.5% until 2030. The global market is anticipated to be worth around $7.4 billion by then, up from $4.3 billion last year. The market holds potential for growth in the coming years and decades, supported by the rapid advancement of healthcare technologies.
Intuitive Surgical, Inc.’s (NASDAQ:ISRG) management has expressed optimism for 2025, expecting a 13%-16% growth in worldwide da Vinci procedures. This optimism comes after the Food and Drug Administration granted clearance to Intuitive Surgical, Inc.’s (NASDAQ:ISRG) newest-generation da Vinci 5, an advanced system that combines a more digital interface with machine learning capabilities and AI. The company ranks fourth on our list of the 10 best medical device stocks to buy according to hedge funds.
Baron Health Care Fund stated the following regarding Intuitive Surgical, Inc. (NASDAQ:ISRG) in its Q2 2024 investor letter:
“Intuitive Surgical, Inc. (NASDAQ:ISRG) manufactures the da Vinci Surgical System, a robotic surgical system used for minimally invasive procedures. The stock performed well due to excitement about the company’s new robotic surgical system, the da Vinci 5, which offers enhanced imaging, force feedback, and other improvements. We continue to believe Intuitive has durable competitive advantages and will remain the market leader in robotic surgery. We think the company has a long runway for growth as more procedures are performed with the company’s equipment.”
3. Boston Scientific Corporation (NYSE:BSX)
Number of Hedge Fund Holders: 92
Boston Scientific Corporation (NYSE:BSX) manufactures, develops, and markets medical devices used in interventional medical procedures. Its operations are divided into Cardiovascular and MedSurg segments. The Cardiovascular segment covers Cardiology and Peripheral Interventions, while the MedSurg segment comprises Urology, Endoscopy, and Neuromodulation.
The company recently announced plans to acquire Bolt Medical, which develops intravascular lithotripsy (IVL), a laser-based technology that helps restore healthy blood flow by breaking up calcium deposits in arteries. The deal, expected to be finalized in the first half of 2025, is expected to expand Boston Scientific Corporation’s (NYSE:BSX) portfolio.
Boston Scientific Corporation (NYSE:BSX) is running on strong fundamentals and reported a 23% growth in operational sales in fiscal Q4 2024. Its organic sales grew by 20%, surpassing the high end of its guidance. Operational sales for the fiscal year 2024 also showed an 18.5% growth, reflecting the strength of its portfolio. The company expects its differentiated financial performance to continue in 2025, supported by its strong global execution and innovative portfolio. It ranks third on our list of the top medical device stocks to buy.
2. 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.
The company is on a solid growth trajectory and reported $11.4 billion in revenue in fiscal Q4 2024, reflecting a 5% year-over-year growth. Its strong cash position further bolsters its standing, as it generated over $7.3 billion in free cash flow in fiscal 2024. Thermo Fisher Scientific Inc. (NYSE:TMO) also has a strong dividend yield, with seven consecutive years of growth. It outperformed the sector median of two years by 250%, reflecting its ability to return value to its shareholders.
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. The company expects to continue its consistent growth, and management forecasts high-single-digit revenue growth in the coming years.
Polen Focus Growth Strategy stated the following regarding Thermo Fisher Scientific Inc. (NYSE:TMO) in its first quarter 2024 investor letter:
“We increased our positions in Thermo Fisher Scientific Inc. (NYSE:TMO), Visa, Zoetis, Nike, and Abbott Labs. Each of these companies is durable and available at attractive valuations, in our view, for the growth we see ahead. In fact, in the case of ThermoFisher, Nike, and Abbott Labs, we expect accelerating earnings growth in the back half of 2024 after more difficult earnings growth periods pass for each of these companies. ThermoFisher and Abbott will finally wind down most of their COVID-19 testing and vaccine-related efforts due to a lack of demand, so these should no longer be revenue growth headwinds.”
1. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 98
Danaher Corporation (NYSE:DHR) designs, manufactures, and markets professional, medical, industrial, and commercial products and services. It operates through Diagnostics, Biotechnology, Life Sciences, and Environmental and Applied Solutions. Its Biotechnology segment offers a range of equipment and consumables for biological medicines, while the Life Diagnostics segment offers clinical instruments, devices, consumables, and other services for the diagnosis and treatment of diseases.
Danaher Corporation’s (NYSE:DHR) focus on high-margin bioprocessing in its life sciences sector is central to its growth strategy. The anticipated recovery in bioprocessing is expected to significantly increase the company’s earnings per share (EPS) in the coming years.
Strong free cash flow generation is another competitive point for the company, as it generated $5.3 billion of free cash flow in fiscal 2024. This resulted in a free cash flow to net income conversion ratio of around 135%. 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.
Madison Sustainable Equity Fund stated the following regarding Danaher Corporation (NYSE:DHR) in its Q3 2024 investor letter:
“Danaher Corporation (NYSE:DHR) released its 2024 Corporate Sustainability Report. It highlighted several milestones across its three pillars of sustainability (building the best team, innovating products that improve lives and the planet, and protecting the environment). The company has committed to setting greenhouse gas emission reduction targets in line with the Science Based Targets initiatives (SBTi), including reaching net-zero value chain emissions by 2050.”
Overall, DHR ranks first among the 10 best medical device stocks to buy according to hedge funds. While we acknowledge the potential of medical device 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 DHR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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