The Healthcare Equipment segment is one of the areas across the broader healthcare landscape that carries immense innovation prospects and also offers a defensive play. This space is characterized by high entry barriers and stringent regulatory requirements, which favor the established players. Moreover, investors are also enticed amid stable demand for the underlying offerings.
On January 23, global consulting and research firm Precedence Research shared its 2026 outlook for the medical manufacturing industry. It highlighted continued optimism amongst the industry players despite some economic and geopolitical headwinds. According to its estimates, the U.S. medical device market is expected to deliver a growth of 6.2% in 2026, reaching a market size of $346.2 billion. The firm noted that the U.S. remains a dominant player in the global medical device market, attributing this to the ever-increasing adoption of advanced medical technologies for critical diagnosis and treatment.
According to Precedence Research, the segment will continue to evolve in various ways heading into 2026. AI seems to have taken center stage as many companies are transforming themselves to integrate with relevant AI tools. Strategic partnerships and M&A activity will rise, as will spending on product launches and diversification. As part of this research, the firm conducted surveys from within the industry to navigate through opportunities and challenges. One of the surveyed executives stated:
“In these times, if you have a diversified footprint, you can build that agility muscle to react without being completely dependent on one thing.”
With that background, let’s explore our 10 Best Healthcare Equipment Stocks to Buy According to Hedge Funds.
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Our Methodology
To identify relevant stocks for this article, we screened U.S.-listed healthcare equipment companies with market capitalizations above $2 billion. Also, we shortlisted only stocks with at least 10% upside potential according to TipRanks consensus, as of the February 20 closing.
Next, we identified the number of hedge funds that held positions in these stocks by the end of the third quarter of 2025. Finally, we selected 10 stocks with the highest number of hedge funds holding stakes and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. IDEXX Laboratories (NASDAQ:IDXX)
Number of Hedge Fund Holders: 55
IDEXX Laboratories (NASDAQ:IDXX) is one of the 10 best healthcare equipment stocks to buy according to hedge funds.
On February 9, David Westenberg from Piper Sandler maintained his Overweight rating on IDEXX Laboratories (NASDAQ:IDXX). The analyst reduced the target price from $775 to $750, which results in a revised upside of 18%. Westenberg’s downward revision of the price target is based on Piper Sandler’s updated multiple for the stock. It also incorporates 2026 projections that have been rolled forward into 2027.
On February 3, the price target on IDEXX Laboratories (NASDAQ:IDXX) was decreased from $830 to $800 by BTIG analyst Mark Massaro. The analyst maintained an Overweight rating on the stock, which yields almost 26% upside potential following the adjustment.
Massaro reflected on the company’s fourth quarter outperformance in terms of revenues and profitability. He also noted the management’s 2026 guidance, which fueled some disappointment. More precisely, the outlook for pet visits remained below consensus estimates. Management has projected it to drop by 200 basis points during 2026.
IDEXX Laboratories (NASDAQ:IDXX) develops and sells diagnostic products for animal veterinary, livestock, and poultry, and water microbiology testing. With operations across 175 countries worldwide, the company covers in-clinic chemistry, hematology, immunoassay, urinalysis, and coagulation analyzers. It aims to derive recurring revenues with high margins by placing diagnostic instruments for tests and consumables within veterinary clinics.
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