In this article, we will take a look at some of the best mid-cap healthcare stocks that are being highly favored by hedge funds. On June 2, Abbott CEO Robert Ford shared his views on how healthcare demand is expected to continue accelerating during an interview with CNBC. He noted that capital allocation has recently shifted towards high-growth AI-ecosystem companies, and the key questions now revolve around the pace of AI adoption. Ford said that healthcare demand is expected to accelerate, pointing to a global population of around 9 billion people living longer and getting older, which is driving increased healthcare needs over time.
He explained that in line with broader healthcare developments, Abbott has repositioned its portfolio to focus on areas with the greatest patient impact and participation in high-growth segments. These include cardiovascular care, medtech, wearables, branded generic pharmaceuticals, and diagnostics such as cancer diagnostics. Such a focused approach backs the company’s growth outlook, pipeline development, and long-term risk profile.
Ford also reflected on underlying challenges in certain segments that have directly impacted consumers. For instance, the nutrition business has faced cost and pricing pressures, which led to a consumer shift away from the category. However, Abbott has been efficient in navigating through these challenges through its recent actions.
Such a proactive approach is highly relevant in today’s immensely competitive healthcare landscape and will prove to be a major differentiator between winners and losers. With that background, let’s explore our 10 Most Promising Mid-Cap Healthcare Stocks According to Hedge Funds.
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Our Methodology
To identify relevant stocks for this article, we screened U.S.-listed healthcare companies with market capitalizations between $2 billion and $10 billion. Also, we only shortlisted stocks with at least 15% upside potential according to consensus, as of the close of June 1.
Next, we identified the number of hedge funds holding positions in these stocks as of the end of Q1 2026. 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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10. Hinge Health Inc. (NYSE:HNGE)
Hinge Health Inc. (NYSE:HNGE) is one of the 10 most promising mid-cap healthcare stocks according to hedge funds.
On May 7, Citizens maintained an Outperform rating for Hinge Health Inc. (NYSE:HNGE) while increasing the price target from $65 to $80. This revision follows strong operational momentum for the company. According to the firm, such growth is mainly driven by the improving profitability margins along with the accelerated invoicing and top-line expansion.
Currently, the company is also experiencing widespread market integration across prominent U.S. insurance networks as well as PBMs. Its continuing market development has been greatly aided by its robust distribution infrastructure and the demonstrated efficacy of its hardware-assisted care delivery. What has also added to the growth is the company’s strategic move to scale up its services portfolio to include extensive chronic ailment and pain therapies.
On May 7, Canaccord revisited its outlook for Hinge Health Inc. (NYSE:HNGE) following the company’s latest operational updates. The firm maintained a Buy rating on the stock and raised the price target from $53 to $63.
The firm noted that recent revenue upside was slightly lower compared to the previous quarter’s results. However, the overall operational efficiency is improving significantly. This is reflected in the company’s impressive margins and highly optimistic guidance from management. Company management also mentioned sharing revised long-term targets for its operating model at a client conference in June.
Hinge Health Inc. (NYSE:HNGE) leverages an AI-enabled care model to automate the delivery of healthcare services. The company delivers customized, drug-free pain relief to users through health plans devised by physical therapists. They address musculoskeletal conditions of patients through an FDA-approved wearable device that is user-friendly and cost-efficient.
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