Following a difficult start in 2025, the ever-evolving life sciences segment recovered strongly in the latter half of the year. This was fueled by a spike in M&A deals and by some activity in the IPO market. Going into 2026, the segment is expected to carry this momentum, with many strategic acquisitions on the cards.
On February 4, Baker Tilley shared this favorable outlook during a forward-looking webinar. The firm underlined major factors that are expected to shape the life sciences segment during 2026. These critical factors revolve around capital allocation, industry regulations, taxation, and global trade. The firm expects greater participation from venture capital and private equity investors, who will be a primary source of funding for many early-stage life sciences businesses.
On February 13, McKinsey & Company also shared its optimistic outlook on strategic deal-making across the segment. The firm sees a notable recovery for life sciences companies, as potential acquirers remain considerate towards certain trends. These include AI-enabled execution of clinical trials, operational flexibility, and attaining expertise in modalities like mRNA, radiopharmaceuticals, and viral vectors.
The above mentioned trends are likely to trigger investor interest, as the underlying businesses offer a strong potential to deliver attractive returns.
With that background, let’s explore our 10 Best Life Sciences 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 life sciences companies with market capitalizations above $2 billion. Also, we shortlisted only stocks with at least 5% upside potential according to TipRanks consensus, as of the February 20 closing.
Next, we identified the number of hedge funds holding positions in these stocks as of 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. Bio-Techne Corporation (NASDAQ:TECH)
Number of Hedge Fund Holders: 43
Bio-Techne Corporation (NASDAQ:TECH) is one of the 10 best life sciences stocks to buy according to hedge funds.
On February 5, Daniel Arias from Stifel Nicolaus reaffirmed his Hold rating on Bio-Techne Corporation (NASDAQ:TECH). He raised the stock’s price target from $60 to $65, implying a double-digit upside potential of 13%.
Arias noted that despite the company’s second-quarter beat, there are expectations of flat mid-year growth. He also anticipates an unchanged forecast for the coming year, along with a downward adjustment for next quarter.
On February 5, Evercore ISI analyst Daniel Markowitz reiterated an In Line rating for Bio-Techne Corporation (NASDAQ:TECH). He also increased the price target from $62 to $68, resulting in more than 18% upside potential at the current level.
Markowitz reflected on the company’s fourth quarter guidance, which suggests a light market recovery. He believes that the FY27 organic growth projections for the company appear promising for investors.
Bio-Techne Corporation (NASDAQ:TECH) develops and markets life sciences instruments, reagents, precision diagnostics, and related services. The company offers these for clinical research, diagnostics, gene therapy, and bioprocessing markets. Its product portfolio includes antibodies, immunoassay kits, automated protein analysis systems, hematology, and molecular diagnostic kits.
