The iShares Biotechnology ETF has gained over 32% in six months due to rate cut expectations and sector rotation. The State Street SPDR S&P Biotech ETF has surged 45% in the same period but remains 27% below its peak. Biotech valuations are still modest despite outperforming the S&P.

Investors looking beyond the AI trade are eyeing the biotech sector for potential gains. The momentum in biotech ETFs is attracting attention, offering a lower correlation to AI names. With the possibility of a rise in M&A activity and reasonable valuations, biotech stocks are gaining interest.

The iShares Biotechnology ETF has seen a 32% increase in the last six months and offers a mix of large-caps and mid-caps. The State Street SPDR S&P Biotech ETF is up 45% in the same period, providing more exposure to mid-caps with a potentially turbulent ride. Both ETFs offer growth opportunities amidst falling rates and AI influence.

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Read more at Yahoo Finance: 2 Brilliant Biotech ETFs to Watch in 2026