In this article, we will look at the 10 Best Performing Healthcare Stocks So Far in 2025.
The Healthcare Sector and its Dynamics in the Stock Market
Despite the ongoing craze surrounding the GLP-1 obesity drugs, the healthcare sector was a lagger last year. On January 3, Jared Holz, Mizuho Securities America’s healthcare sector strategist, appeared on CNBC’s ‘Squawk on the Street’ to talk about the healthcare sector’s outlook in 2025. While he anticipates another year of underperformance for the sector, he also believes that healthcare has “been so bad, maybe it’s gonna be good” in 2025.
Holz further said that the healthcare sector presents a calamity since there aren’t a lot of easy spaces in the domain. Other industry verticals, such as technology and financials, are well set up. Healthcare, in contrast, appears to have several variables in place, and most of them are not positive. However, he believed that the MedTech sector provides a sort of safety net in such a tumultuous sector. We talked about the medical device sector and the future of the healthcare industry in the US in a recently published article on 10 Best Medical Device Stocks To Buy According to Hedge Funds. Here is an excerpt from the article:
“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”.
AI and its Use in Healthcare: Is It All a Hoax?
Talking about the recent trends involving the increasing use of AI in the healthcare sector, Holz said that the scenario is possibly helping the software and technology companies more than healthcare ones. AI and its impact on drug development in clinical trials is another significant subject of discussion in the healthcare sector. However, Holz said that the industry is not really seeing the positive impact of the adoption of AI in the sector. Several clinical trials employing AI have failed in the recent past.
So, even though it seems that the science and technology behind the scenes is getting better, it hasn’t necessarily translated to better drug development and higher approval rates. Although he expects that the use of AI may lead to better results in the future, Holz believes that it is too early to make generalizations that the AI craze will lead to better results for biotech or pharma, at least in the near term.
With these trends in view, let’s look at the 10 best performing healthcare stocks so far in 2025.
A pharmacy employee stocking prescription drugs on the shelves.
Our Methodology
We used Finviz to screen healthcare stocks and looked at their year-to-date (YTD) performance, as of February 17, 2025, to select the best performing stocks. We also included the number of hedge fund holders for each stock as of Q3 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of year-to-date performance.
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 Performing Healthcare Stocks So Far in 2025
10. Doximity, Inc. (NYSE:DOCS)
YTD Performance: 45.96%
Number of Hedge Fund Holders: 19
Doximity, Inc. (NYSE:DOCS) develops and operates an online platform for medical professionals. Its cloud-based software allows physicians and healthcare professionals to collaborate with their colleagues, conduct virtual patient visits, coordinate patient care, manage their careers, and stay on top of the latest medical news. It offers Hiring, Marketing, and Productivity Solutions to health systems, pharmaceutical manufacturers, medical recruiting firms, and other healthcare companies. Its Productivity Solutions segment comprises on-call scheduling, telehealth, and AI-assisted medical correspondence tools that help clinicians streamline their workflow.
The company reported impressive fiscal Q3 2025 results, resulting in soaring bullish sentiments for the company. Its net income for fiscal Q3 2024 grew 57% year-over-year to $75.2 million, while net profit for the first nine months rose by 50.2% year-over-year to $160.7 million. Revenue for fiscal Q3 2025 also grew by 24.6% year-over-year, reaching $168.6 million. Doximity, Inc. (NYSE:DOCS) expects this momentum to continue and anticipates revenue for the full fiscal year ending March 31, 2025, to settle between $564.6 million and $565.6 million.
Doximity, Inc. (NYSE:DOCS) anticipates the pharma healthcare professionals (HCP) digital market to grow approximately 5% to 7%, and plans to grow ahead of the overall market. Its record engagement and strong competitive standing position it to attain this objective. It ranks tenth on our list of the 10 best performing healthcare stocks so far in 2025.
9. CVS Health Corporation (NYSE:CVS)
YTD Performance: 46.65%
Number of Hedge Fund Holders: 63
CVS Health Corporation (NYSE:CVS) is a health solutions company that operates in four segments: healthcare benefits, health services, pharmacy & consumer wellness, and corporate/other. Apart from being a prominent pharmacy chain, the company is one of the largest health insurers in the United States through its Aetna subsidiary’s operations.
While the company has uncertainty surrounding its future performance under a new CEO, its total revenue for fiscal Q4 2024 increased to $97.7 billion, reflecting a 4.2% growth compared to the prior year and bringing optimism to its operations. Although the company has delivered underwhelming results in the past, it is undergoing several recent management changes and initiatives that are expected to bring it back on track.
CVS Health Corporation (NYSE:CVS) has a diversified business, and its solid market presence across various segments gives it a competitive edge. In recent years, it has focused on primary care, expanding its portfolio through its Cordavis subsidiary, which markets and develops biosimilar drugs. Its median price target of $64.97 implies an upside of 12.36% from current levels. On February 18, Argus raised the company’s price target to $77 from $68 and kept a buy rating on the shares.
Patient Capital Management stated the following regarding CVS Health Corporation (NYSE:CVS) in its Q4 2024 investor letter:
“CVS Health Corporation (NYSE:CVS) struggled throughout the year following a number of disappointments related to their Medicare Advantage business. While this had a negative impact on the near-term financials, the issues are well understood, and changes are already being made for the 2025 program. We see a clear pathway to improving margins throughout 2025 in all areas of the business. Furthermore, the company has upgraded their management team promoting David Joyner to CEO and hiring former UnitedHealth Group executive Steven Nelson to run the managed care business. On a longer-term basis, we continue to think CVS has an attractive combination of assets owning a healthcare benefits business (Aetna), a pharmacy-benefits manager (Caremark), an in-home evaluation business (Signify Health) and in-home primary care business (Oak Street Health) supporting the industry transition to a value-based care model. As the company works to implement the turnaround, the company has an attractive dividend yield of 5.8%.”
8. Axsome Therapeutics, Inc. (NASDAQ:AXSM)
YTD Performance: 55.01%
Number of Hedge Fund Holders: 38
Axsome Therapeutics, Inc. (NASDAQ:AXSM) is a commercial-stage biopharmaceutical company that develops and delivers therapies for central nervous system (CNS) conditions with limited treatment options. Its two commercial products and development programs include Auvelity and Sunosi. Auvelity treats major depressive disorder (MDD), and Sunosi is an oral medication for the treatment of excessive daytime sleepiness (EDS) in patients with narcolepsy or obstructive sleep apnea.
Apart from Auvelity and Sunosi, the company’s pipeline features five innovative late-stage product candidates in development, along with nine indications across psychiatry and neurology. Axsome Therapeutics, Inc.’s (NASDAQ:AXSM) late-stage pipeline positions it to deliver new medicines across therapeutic areas, impacting over 150 million patients in the US. If developed successfully, this portfolio holds the potential to provide more than $16 billion in peak sales.
Axsome Therapeutics, Inc. (NASDAQ:AXSM) also has strong financials. It reported quarterly product revenue of over $100 million for the first time in fiscal Q3 2024. This quarterly performance translates to an annual revenue rate of around $420 million. The company reported these results just three quarters into its second full year as a commercial therapy.
7. Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX)
YTD Performance: 55.77%
Number of Hedge Fund Holders: 16
Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) is an emerging clinical-stage biotech firm that uses AI, bioinformatics, experimental biology, and automation to industrialize drug discovery for various diseases. It also collaborates with leaders in the drug discovery space to reduce timelines and costs for identifying and optimizing lead candidates.
The company’s Recursion Operating System (OS), a platform built across diverse technologies, allows it to map and navigate trillions of chemical and biological relationships within the Recursion Data Universe. It has several clinical programs, including REC-994, REC-2282, REC-4881 and REC-3964.
Investors are bullish on Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) as Nvidia Corp. held on to its shares in the company while disposing of stocks in other companies. Nvidia Corp recently submitted regulatory filings showing ownership reduction and increases in various stocks, retaining its 7.7-million holdings in Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX). This news instilled optimistic sentiments in the company’s future performance. The company ranks seventh on our list of the 10 best performing healthcare stocks so far in 2024.
6. Inari Medical, Inc. (NASDAQ:NARI)
YTD Performance: 56.57%
Number of Hedge Fund Holders: 27
Inari Medical, Inc. (NASDAQ:NARI) is a medical device company that develops, manufactures, and markets devices for the interventional treatment of venous diseases. Its products primarily comprise FlowTriever and ClotTriever systems, which are used to treat venous thromboembolism (VTE), deep vein thrombosis (DVT), and pulmonary embolism (PE). The company also has an InThrill system that removes emboli and thrombi from the peripheral vasculature and the LimFlow system for chronic limb-threatening ischemia, in addition to other offerings. Inari Medical, Inc.’s (NASDAQ:NARI) stock is gaining value after a buyout deal from Stryker, which announced that it is buying Inari Medical, Inc. (NASDAQ:NARI) for $4.9 billion at $80 per share in cash.
Inari Medical, Inc. (NASDAQ:NARI) has strong financials. It reported a revenue of $153.4 million in fiscal Q3 2024, up 21.4% compared to $126.4 million in fiscal Q3 2023. Gross profit was $133.5 million for fiscal Q3 2024, compared to $111.9 million in the same quarter last year. This growth was attributed to an expansion in its sales territories, increased adoption of its procedures, the opening of new accounts, global commercial expansion, and the introduction of new products.
Baron Discovery Fund stated the following regarding Inari Medical, Inc. (NASDAQ:NARI) in its Q3 2024 investor letter:
“We added to our position in Inari Medical, Inc. (NASDAQ:NARI) in the quarter at what we believe are attractive valuations for a market leading medical device company. Inari offers catheter-based devices to remove clots caused by venous thromboembolism (VTE). VTE is a disease state that manifests as deep vein thrombosis (DVT), in which a clot cuts off blood flow in a deep vein (usually in the leg), and as pulmonary embolism (PE), when the clot in the leg breaks off and circulates to lodge in the blood vessels that supply the lungs. Despite beating its second quarter earnings and raising full-year guidance, Inari shares have been pressured after the release of competitor Penumbra, Inc.’s new product for DVT treatment. Both companies have very good products for DVT. We believe that there are huge opportunities for both companies to grow in DVT (by displacing other treatments), and Inari, in particular, has even bigger opportunities in PE (which it dominates) also by displacing other treatments.
PE and DVT are each markets worth about $3 billion per year (a $6 billion total market opportunity). Right now, about 80% receive just blood thinners which do nothing for existing clots, while only 20% receive any sort of more in-depth intervention. And then of this 20%, still a third are on thrombolytics, which has a high risk of bleeding and require an ICU stay for monitoring. Inari is working on studies that it believes will show superiority of its devices to using lytics or blood thinners. Its first PE study (superiority of an Inari device to using lytics) is due to read out in the fourth quarter of 2024. It has another PE study which should read out over the next couple of years that should help open up the remaining 80% of the PE market (superiority of an Inari device versus using blood thinners). In addition, Inari is at various stages of launching multiple new products (for other venous and arterial blockage conditions) which could unlock nearly $4 billion in additional addressable market opportunities. And it is launching its products in foreign markets as well. In other words, although a portion of its markets are facing increased competition, we believe there is a huge amount of overall growth opportunity that is wide open for Inari, and the stock is trading at a valuation that currently does not reflect these opportunities.”
5. Guardant Health, Inc. (NASDAQ:GH)
YTD Performance: 57.51%
Number of Hedge Fund Holders: 28
Guardant Health, Inc. (NASDAQ:GH) is a precision oncology company specializing in treating cancer through vast data sets, proprietary blood-based tests, and advanced analytics. The company’s solutions include recurrence detection, early detection, and treatment selection.
Guardant Health, Inc. (NASDAQ:GH) has experienced significant stock gains year-to-date. It has strong operations and reported solid preliminary fiscal Q4 results. Its revenue was around $200 million, reflecting a 29% growth and surpassing analyst estimates of $188.9 million. Its full-year 2024 revenue reached approximately $737 million, up 31% and exceeding analyst estimates of $723.9 million.
The company is expanding its Medicare coverage for Guardant Reveal, its liquid biopsy test for monitoring disease recurrence in patients with colorectal cancer. Guardant Health, Inc. (NASDAQ:GH) has also Resolved FDA concerns about respiratory toxicity in non-rodent studies, clearing a hurdle for its Investigational New Drug (IND) application. In addition, the company has obtained Medicare coverage for its minimal residual disease (MRD) test and launched a blood test for colorectal cancer. It takes the fifth spot on our list.
4. Teladoc Health, Inc. (NYSE:TDOC)
YTD Performance: 57.65%
Number of Hedge Fund Holders: 32
Teladoc Health, Inc. (NYSE:TDOC) provides virtual healthcare services and operates through two segments: BetterHelp and Teladoc Health Integrated Care. The BetterHelp sector covers its direct-to-consumer (D2C) mental health platform. Teladoc Health Integrated Care comprises a range of global virtual medical services, including specialty medical, expert medical services, general medical, mental health, chronic condition management, and more.
The company recently announced a collaboration with Amazon.com to increase the availability of its chronic condition programs. Qualifying Amazon customers can benefit from Teladoc Health, Inc.’s (NYSE:TDOC) chronic condition management programs, such as pre-diabetes, diabetes, weight management, and hypertension, through Amazon’s Health Benefits Program.
On February 5, Teladoc Health, Inc. (NYSE:TDOC) entered into a definitive contract to acquire Catapult Health, a digital preventive care services supplier, for $65 million in cash with an additional $5 million in performance-based compensation. The company plans to improve its comprehensive care solutions by implementing Catapult Health’s patient-focused approach to personalized supportive care and at-home testing. Subject to customary closing conditions, the transaction is expected to be completed in the first quarter of 2025.
Brown Capital Management Mid Company Fund stated the following regarding Teladoc Health, Inc. (NYSE:TDOC) in its Q2 2024 investor letter:
“Teladoc Health, Inc. (NYSE:TDOC) operates a telehealth platform that provides on-demand healthcare services to its members in the U.S. and abroad. Its solution connects consumers with physicians and behavioral health professionals who treat a range of conditions. The company offers its services through mobile devices, desktop, and by video or phone. Our initial excitement over Teladoc’s market-leading position, large market opportunity and compelling value proposition ran into the reality of the company’s deteriorating fundamentals. Competitive pressure, high customer-acquisition costs and poor customer retention significantly impaired the company since our initial purchase in March 2020. Additionally, questionable acquisitions and executive turnover further weighed on the business, resulting in revenue growth declining from the high-20s/low-30s to low-single-digits without any improvement in profitability. Although we pride ourselves on being patient and tolerant, it became obvious that our investment thesis was wrong, and we sold the company from the Fund.”
3. SpringWorks Therapeutics, Inc. (NASDAQ:SWTX)
YTD Performance: 58.95%
Number of Hedge Fund Holders: 36
SpringWorks Therapeutics, Inc. (NASDAQ:SWTX) is a commercial-stage biopharmaceutical company focusing on cancer and severe rare diseases. OGSIVEO (nirogacestat) is its FDA-approved therapy for treating progressing desmoid tumors in the US. The company also has a diversified targeted therapy pipeline covering hematological cancers and solid tumors, with programs ranging from preclinical development to advanced clinical trials.
SpringWorks Therapeutics, Inc. (NASDAQ:SWTX) reported $61.5 million in net product revenue for fiscal Q4 2024 and $172.0 million for the entire year in its preliminary results. The company also has $461.9 million in total preliminary cash, cash equivalents, and marketable securities as of December 31, 2024. Management expects its cash position to fund operations through profitability, which the company intends to attain in the first half of 2026.
OGSIVEO is driving the company’s growth, with robust demand from both new and existing patients. SpringWorks Therapeutics, Inc.’s (NASDAQ:SWTX) market research shows that it has only reached a small portion of people with desmoid tumors who can potentially benefit from OGSIVEO, reflecting significant potential in the domain.
On February 11, Reuters reported that Merck, the German healthcare group, and SpringWorks Therapeutics, Inc. (NASDAQ:SWTX) are in advanced talks for a potential merger. However, no legally binding agreement has been signed between the two companies yet, and there is no certainty that the acquisition will materialize.
2. Akero Therapeutics, Inc. (NASDAQ:AKRO)
YTD Performance: 81.60%
Number of Hedge Fund Holders: 30
Akero Therapeutics, Inc. (NASDAQ:AKRO) is a clinical-stage company that develops transformational treatments for patients with serious metabolic diseases that have high unmet medical needs, such as metabolic dysfunction-associated steatohepatitis (MASH), which does not have any approved therapies. The company’s primary product is efruxifermin (EFX), which treats MASH and is undergoing phase 3 of clinical trials. Efruxifermin (EFX) is an analog of fibroblast growth factor 21, an endogenously expressed hormone that regulates carbohydrates, lipids, and proteins while offering protection against cellular stress.
The Phase 2b study of the drug was well-received by participants, with no deaths and only minor adverse effects reported, causing the stock to surge in January. EFX has the potential to become a first-in-class therapy for MASH-induced cirrhosis, which is causing investors to be bullish on the company.
Akero Therapeutics, Inc. (NASDAQ:AKRO) also completed an upsized public offering in January, raising $402.5 million by selling 6.4 million shares at $48 each. 30 hedge funds hold stakes in the company as of Q3 2024. Its median price target of $50.62 implies an upside of 48.18% from current levels.
1. Tempus AI, Inc (NASDAQ:TEM)
YTD Performance: 164.93%
Number of Hedge Fund Holders: 7
Tempus AI Inc (NASDAQ:TEM) is a healthcare technology company that brings AI and machine learning to healthcare. The company provides next-generation diagnostics across various disease areas by employing technology capabilities. It leverages analytics and data to personalize medicine and has a product line spanning data, genomics, and AI applications. Tempus AI Inc (NASDAQ:TEM) focuses on building platforms for cardiology, oncology, infectious diseases, neuropsychiatry, and radiology.
On February 13, Tempus AI, Inc. (NASDAQ:TEM) announced a partnership with the Institute for Follicular Lymphoma Innovation (IFLI), a non-profit, private foundation focused on accelerating the development of innovative treatment options for patients with follicular lymphoma (FL). The partnership aims to develop targeted therapies for the disease by developing a real-world multimodal, de-identified FL data library in Lens, Tempus’ data analytics platform, through which researchers may derive AI-driven insights to accelerate the development of FL treatments and improve patient outcomes. The development of this follicular lymphoma data library holds the potential to expand understanding of the disease’s biology.
The company also has solid operations and reported a revenue of $693 million for the full year 2024, a 30% growth year-over-year. Last month, Tempus AI, Inc. (NASDAQ:TEM) launched a new xT CDx, an FDA-approved Next-Generation Sequencing in vitro diagnostic device available to all healthcare professionals nationwide. xT CDx offers one of the most comprehensive gene panels available and examines 648 genes to identify solid tumors. It also offers crucial insight to support treatment decisions for colorectal cancer patients.
Baron Discovery Fund stated the following regarding Tempus AI, Inc (NASDAQ:TEM) in its Q3 2024 investor letter:
“Shares of Tempus AI, Inc (NASDAQ:TEM) contributed to performance. Tempus is a cancer diagnostics company that provides genomic testing results. Tempus has also amassed an over 200 petabyte proprietary multimodal dataset that combines clinical patient data with genomic testing data. In addition to using this data to empower more intelligent diagnostics for its own tests, Tempus also licenses this data to biopharmaceutical companies which use it to design smarter clinical trials and identify potential new drug targets. We think this proprietary dataset is unique with meaningful barriers to entry, and brings meaningful value to biopharmaceutical R&D. As we mentioned in the letter from last quarter, shares have been incredibly volatile. We took advantage of this volatility to buy a meaningful position when shares sold off into the low $20’s per share from an IPO price of $37. When shares spiked into the mid-$70’s (likely due to short sellers covering losses as shares rose), we took profits on a meaningful portion of the investment as we believed valuation had become stretched (shares now trade in the high $40’s to low $50’s level). We like our position sizing now, and would add to the position at lower valuations. We believe that Tempus has significant growth ahead of it and we are excited about its unique business model.”
Overall, TEM ranks first among the 10 best performing healthcare stocks so far in 2025. While we acknowledge the potential of healthcare 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 TEM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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