We recently published a list of the 10 Best Cancer Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Thermo Fisher Scientific Inc. (NYSE:TMO) stands against other best cancer stocks to buy.
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.
READ ALSO: 12 Best Stocks to Buy in 2025 for Beginners and 12 Undervalued Defensive Stocks for 2025.
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.
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).
A workstation in a research lab stocked with laboratory products and services.
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.
Overall, TMO ranks 3rd on our list of the best cancer stocks to buy according to hedge funds. While we acknowledge the potential of TMO, 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 TMO 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
Disclosure: None. This article is originally published at Insider Monkey.
