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.
9. ICON Public Limited (NASDAQ:ICLR)
Number of Hedge Fund Holders: 43
ICON Public Limited (NASDAQ:ICLR) is one of the 10 best life sciences stocks to buy according to hedge funds.
On February 17, Rothschild & Co Redburn analyst Jamie Clark sharply reduced the price target on ICON Public Limited (NASDAQ:ICLR) from $226 to $100. The analyst also downgraded his rating on the stock from Buy to Neutral.
Clark cited the company’s announcement of an internal accounting investigation as the key reason for the downgrade. He believes that potential financial restatements could hugely impact the company’s recent earnings picture and alter expectations for future growth. Preliminary findings suggest that revenues for FY 2023 and 2024 may have been overstated.
On January 9, the price target for ICON Public Limited (NASDAQ:ICLR) was reduced from $225 to $216 by Mizuho Securities. The firm maintained its Outperform rating on the stock, with an upside potential of almost 117% even after the revision.
Following a Q4 preview, the firm had noted that healthcare utilization growth decelerated sequentially. Despite facing an easier year-over-year comparable, the firm’s physician survey suggests this growth trend may be peaking, leading to the revised target.
ICON Public Limited (NASDAQ:ICLR) is a contract research organization that delivers clinical research, along with outsourced development and commercialization services. The company offers its services to various segments such as biotechnology, pharmaceutical, public health organizations, and medical device companies. It covers different stages of clinical development, including Phase I-IV clinical trials.
8. Mettler-Toledo International (NYSE:MTD)
Number of Hedge Fund Holders: 49
Mettler-Toledo International (NYSE:MTD) is one of the 10 best life sciences stocks to buy according to hedge funds.
On February 9, Catherine Schulte from Baird reiterated her Neutral rating on Mettler-Toledo International (NYSE:MTD). In the process, she also raised the price target on the stock slightly from $1,444 to $1,445. Schulte shared an optimistic view on Mettler-Toledo International (NYSE:MTD) after the fourth quarter announcements. This also led Baird to revise its model for the company.
On February 7, the price target for Mettler-Toledo International (NYSE:MTD) was increased from $1,600 to $1,640 by Bank of America Securities analyst Michael Ryskin. He reaffirmed his Buy rating on the stock with more than 19% upside potential for investors.
Ryskin’s upward revision follows an impressive fourth quarter report for Mettler-Toledo International (NYSE:MTD), driven by strong execution and share gains. He also reflected on the management’s guidance for the first quarter, which he believes is reasonably conservative. However, Ryskin views such guidance to be in line with peers within the current macroeconomic landscape.
Mettler-Toledo International (NYSE:MTD) is a supplier of precision instruments and services across the globe. The company provides a range of laboratory instruments, including liquid pipetting solutions, pH meters, analytical sensors, thermal analysis systems, UV/VIS spectrophotometers, and more. It also offers industrial instruments, industrial software, and retail weighing solutions.
7. West Pharmaceutical Services (NYSE:WST)
Number of Hedge Fund Holders: 49
West Pharmaceutical (NYSE:WST) is one of the 10 best life sciences stocks to buy according to hedge funds.
On February 17, the governing body of West Pharmaceutical (NYSE:WST) approved a new share repurchase program authorizing the buyback of up to $1 billion of its common stock. The firm highlighted that the previous repurchase program had been fully utilized ahead of its December 31, 2025, expiration. The new authorization reflects continued capital return initiatives and provides the company with added flexibility to repurchase shares.
On February 13, BofA analyst Michael Ryskin reduced his price target on West Pharmaceutical (NYSE:WST) from $370 to $300, yielding a revised upside potential of more than 24%. The analyst maintained his Buy rating on the shares.
Ryskin highlighted the company’s strong finish to the year and noted that the FY26 outlook came in ahead of consensus, supported by faster expansion in non-GLP-1 high-value products. Following the earnings report and updated outlook, BofA revised its model. However, the firm applied a more conservative valuation multiple, citing broader sector multiple compression.
West Pharmaceutical (NYSE:WST) specializes in designing and manufacturing integrated containment and delivery systems for healthcare products and injectable drugs. The company has a presence across 50 countries worldwide, offering seals, stoppers, syringes, cartridge components, and self-injection devices. It also delivers other services such as analytical lab services, pre-approval primary packaging support, regulatory expertise, and after-sales support.
6. Charles River Laboratories (NYSE:CRL)
Number of Hedge Fund Holders: 50
Charles River Laboratories (NYSE:CRL) is one of the 10 best life sciences stocks to buy according to hedge funds.
On February 20, Mizuho Securities analyst Ann Hynes maintained her Neutral rating on Charles River Laboratories (NYSE:CRL). She reduced the firm’s price target on the stock from $215 to $175. Estimates were lowered following mixed fourth-quarter results.
Hynes believes the revision reflects expectations for slower organic growth in 2026 and lower free cash flow than previously anticipated. The firm also applied a more conservative valuation multiple, citing broader AI-related concerns across the industry.
On February 19, Baird analyst Eric Coldwell also reduced the firm’s price target on Charles River Laboratories (NYSE:CRL) from $231 to $193. The analyst maintained his Outperform rating on the stock, with a revised upside potential of almost 14%. Coldwell’s revision came after the company’s fourth-quarter results, which prompted him to revise his model.
Charles River Laboratories (NYSE:CRL) is a pre-clinical contract research organization that offers drug discovery, non-clinical development, and safety testing services. The company serves different segments, including pharmaceutical & biotechnology companies and academic institutions. It provides support in research models and screening candidates for pre-clinical drugs.
5. Bruker Corporation (NASDAQ:BRKR)
Number of Hedge Fund Holders: 50
Bruker Corporation (NASDAQ:BRKR) is one of the 10 best life sciences stocks to buy according to hedge funds.
On February 13, Jefferies analyst Tycho Peterson reduced the firm’s price target on Bruker Corporation (NASDAQ:BRKR) from $55 to $50. The analyst maintained his Buy rating on the shares with an upside potential of almost 31%.
Peterson noted that the fourth quarter marked an end to a difficult year for the company, largely driven by soft U.S. A&G demand. For 2026, he expects improving conditions, though he does not anticipate a sharp rebound. He added that the first quarter expectations have recently been lowered, but not by too much. This leads to a heavier reliance on a strong second-half recovery to meet full-year expectations.
On February 13, BofA analyst Michael Ryskin reduced the firm’s price target on Bruker Corporation (NASDAQ:BRKR) from $60 to $49. The analyst maintained a Buy rating on the shares with an upside potential of 28%.
Ryskin mentioned that FY26 targets remain in line with or slightly ahead of consensus. However, a fourth-quarter margins miss, and the need for a sharp performance ramp through 2026 is keeping investors cautious. While the analyst remains constructive on the company’s outlook, he lowered its valuation multiple on the 2027 EBTIDA estimate, citing multiple compression across peers.
Bruker Corporation (NASDAQ:BRKR) is involved in the development and distribution of high-performance scientific instruments and analytical and diagnostic solutions. Their offerings are useful in pharmaceutical and molecular research, biotechnology, and materials analysis. It functions through 4 distinct segments, i.e., BSI BioSpin, BSI Nano, BSI CALID, and Bruker Energy & Supercon Technologies (BEST).
4. Agilent Technologies (NYSE:A)
Number of Hedge Fund Holders: 53
Agilent Technologies (NYSE:A) is one of the 10 best life sciences stocks to buy according to hedge funds.
On February 12, Agilent Technologies (NYSE:A) announced that its PD-L1 IHC 22C3 pharmDx, Code SK006, had been approved by the U.S. FDA. This makes it the only authorized companion diagnostic to help identify patients with epithelial ovarian, fallopian tube, or primary peritoneal carcinoma who may qualify for treatment with KEYTRUDA (R).
The company highlighted that the test allows pathologists to evaluate PD-L1 expression at diagnosis, supporting more informed therapy decisions in cancers where treatment options remain limited. This marks the seventh FDA-approved indication for the diagnostic in connection with KEYTRUDA.
On January 20, HSBC analyst Sidharth Sahoo initiated coverage of Agilent Technologies (NYSE:A) with a Buy rating. He estimated a price target of $180 for the stock, yielding almost 47% upside potential. The analyst acknowledged the company as a global leader in life sciences and diagnostics. Sahoo views the company to be well-positioned for sustained bottom-line growth.
Agilent Technologies (NYSE:A) delivers application-focused solutions, analytical instruments, and software to life sciences, diagnostics, and applied chemical markets. Its offerings include liquid chromatography systems, genomics, contract development, pathology, and biomolecular analysis. The company also offers part repair & maintenance, installations, and compliance support.
3. IQVIA Holdings (NYSE:IQV)
Number of Hedge Fund Holders: 61
IQVIA Holdings (NYSE:IQV) is one of the 10 best life sciences stocks to buy according to hedge funds.
On February 19, Jailendra Singh from Truist Financial reiterated his Buy rating for IQVIA Holdings (NYSE:IQV). He lowered the price target on the stock from $290 to $274, which still offers an impressive upside potential of more than 65% despite the revision.
Singh’s price target revision followed the company’s fourth-quarter results, prompting the firm to adjust its model. These adjustments incorporate a re-segmentation for the company, as well as a reduction in the forward EBITDA multiple projections, from 14x to 13x. They also take into account the AI-related uncertainties in the near-term.
On February 17, Charles Rhyee from TD Cowen reaffirmed his Hold rating on IQVIA Holdings (NYSE:IQV) and lowered the price target from $245 to $174. The firm revised its model following the fourth quarter announcements. He acknowledged that while AI poses potential risks to the segment, these are likely to emerge over the long-term. But for now, the impact on CROs remains uncertain.
IQVIA Holdings (NYSE:IQV) delivers clinical research services, advanced analytics, commercial insights, and market intelligence to healthcare and life sciences segments worldwide. The company covers end-to-end clinical trials, offering protocol design, site selection, recruitment, and data analysis. It also offers cloud-based commercial solutions such as CRM, contract sales, and analytics.
2. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 117
Danaher Corporation (NYSE:DHR) is one of the 10 best life sciences stocks to buy according to hedge funds.
On February 17, Danaher Corporation (NYSE:DHR) announced an agreement to acquire Masimo Corporation (NASDAQ:MASI) for nearly $9.9 billion. In the all-cash deal, Danaher will acquire 100% of the common shares outstanding at $180 per share. This translates into 2027 forecasted EBITDA multiples of 15x and 18x, with and without potential synergies, respectively.
Rainer M. Blair, Danaher’s President and Chief Executive Officer, was encouraged by the deal and stated:
“We’ve followed this innovative company for many years and see it as an exceptional strategic fit for Danaher. Masimo is a leader in pulse oximetry and other patient monitoring solutions, which combined with its trusted brand and differentiated technology, will greatly strengthen our diagnostics franchise. With the Danaher Business System and our global scale, we see opportunities to expand Masimo’s reach and continue improving outcomes for patients, particularly those in acute care settings.”
The deal is expected to close in the second half of 2026.
Earlier, on January 29, the price target on Danaher Corporation (NYSE:DHR) was increased from $250 to $254 by Evercore ISI analyst Vijay Kumar. The analyst maintained his Buy rating on the stock with a revised upside potential of more than 21% from the prevailing level.
After Danaher’s earlier forecasts for FY26, the Q4 call offered no surprises to that. Kumar views the current guidance as conservative with room for growth, since it excludes assumptions around potential capital deployments. He also anticipates a possible recovery in the life sciences end market.
Danaher Corporation (NYSE:DHR) is a science and technology innovator that offers medical, research, and industrial products and services, with an emphasis on biotechnology, life sciences, and diagnostics. Operating through its subsidiaries, it delivers various solutions, including advanced testing, bioprocessing technologies, cell culture media development services, filtration technologies, and more.
1. Thermo Fisher Scientific (NYSE:TMO)
Number of Hedge Fund Holders: 121
Thermo Fisher Scientific (NYSE:TMO) is one of the 10 best life sciences stocks to buy according to hedge funds.
On January 30, Daniel Arias of Stifel Nicolaus maintained a Buy rating on Thermo Fisher Scientific (NYSE:TMO), with a $700 price target. The analyst reflected on the company’s strong finish to 2025, highlighting that Thermo Fisher Scientific (NYSE:TMO) was among the few sector names that did not pre-announce results before delivering a solid Q4 beat.
The company reported revenue growth of 3.91% over the past twelve months, with total revenue reaching $44.56 billion. Management shared guidance of roughly 3–6% organic growth in 2026, initially leaning towards the lower end of the range, indicating a cautious but stable outlook.
On January 30, Catherine Schulte from Baird increased the price target on Thermo Fisher Scientific (NYSE:TMO) from $645 to $653, maintaining her Outperform rating on the shares. Baird revised its model following the fourth-quarter announcement and continues to view the stock as a top investment idea.
Thermo Fisher Scientific (NYSE:TMO) facilitates research and diagnostics through high-end life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products. The company also offers software, consumables, pharma, and instrument services to various research and industrial markets. It covers several segments such as academics, biotechnology, government, pharmaceuticals, and others.
While we acknowledge the potential of TMO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TMO and that has 100x upside potential, check out our report about this cheapest AI stock.
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