Healthcare sector is projected to rebound in 2025, with Illumina, Inc. being highlighted by hedge funds
From Yahoo Finance: 2025-05-14 07:43:00
In 2025, the U.S. healthcare sector outperformed the broader market, with a 2.59% surge in the S&P 500 healthcare sector, contrasting the Information Technology and Consumer Discretionary sectors’ losses. Illumina, Inc. (NASDAQ:ILMN) is highlighted among small-cap healthcare stocks hedge funds are buying, showing promise in the industry’s economic improvement.
Historically, healthcare stocks perform better as inflation eases, with BlackRock reporting 75% of healthcare companies exceeding earnings expectations in 2024. The healthcare sector is projected to rebound in 2025 with the highest year-over-year growth in 18 years, positioning it for substantial growth and profitability.
Despite the positive outlook for the healthcare sector, Trump’s tariffs pose a significant obstacle, potentially raising drug and medical device costs by 10-15%. The U.S. healthcare sector, accounting for a fifth of the economy, faces challenges with tariffs affecting overseas manufacturing of medical devices.
Illumina, Inc. (NASDAQ:ILMN) had a breakthrough as the SEC dropped enforcement action related to the Grail acquisition, allowing the company to focus on local partnerships after spinning off Grail in 2024. Despite a lowered earnings guidance, analysts remain optimistic, citing strong mitigation efforts and potential growth in the AI sector for higher returns.
The U.S. government’s recent tariff agreements with China aim to reduce duties by 115 percentage points over 90 days, benefiting both countries’ trade relations. As the healthcare sector adapts to digital transformation and innovation, the global market is projected to reach $44.76 trillion by 2032, with North America holding a significant share.
In an effort to track successful investments, Insider Monkey compiled a list of 15 small-cap healthcare stocks hedge funds are buying, including Illumina, Inc. (ILMN). By mirroring top hedge fund stock picks, investors have the potential to beat the market, with Insider Monkey’s strategy returning 373.4% since May 2014, outperforming the benchmark by 218 percentage points.
Read more at Yahoo Finance: Among Small-Cap Healthcare Stocks Hedge Funds Are Buying