It is challenging to identify segments within the markets that appear to be defensive plays, yet offer innovation potential. The medical devices industry is one such space that attracts investors due to the amalgamation of many such factors. On one hand, it appears defensive in nature due to strong entry barriers, underlying regulatory scrutiny, and consistent demand patterns. On the other hand, it offers immense growth potential due to rapid innovations that keep on reshaping the segment from time to time. The medical devices industry has strong interlinkages with medical technology evolution, which forms the basis for engineering and functionality of equipment used in the broader healthcare sector. Many businesses are integrating inorganically to make themselves more efficient and profitable, with the ultimate aim of enhancing patient experience.
On December 16, PwC shared its 2026 deals outlook for the U.S. Medical Technology landscape, following a surge in deal value to above $97 billion in 2025. The firm identified digital transformation trends such as AI-driven analytics, robotics, and connected-care ecosystems to be at the heart of capital deployment towards inorganic growth. Companies will aim to divest many of their subscale segments in pursuit of more scalable operations. The firm also underlined a growing role of private equity firms in Medtech deals, not just as capital providers but also as operational stakeholders. This provides a new way of accelerating innovation within this segment.
With that background, let’s explore our 12 best Medical Devices stocks to invest in according to Hedge Funds.
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Our Methodology
To identify relevant stocks for this article, we conducted a screening of U.S.-listed medical device companies having market capitalizations above $2 billion. We then added a filter to include companies with share prices above $5 to ensure we do not include penny stocks in our list. Also, we shortlisted only stocks with at least 10% upside potential according to TipRanks consensus, as of the January 28 close.
In the last part of the screening, 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 12 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).
12. Haemonetics Corporation (NYSE:HAE)
Number of Hedge Fund Holders: 36
Haemonetics Corporation (NYSE:HAE) is one of the 12 best Medical Devices stocks to invest in according to Hedge Funds.
On January 12, Michael Petusky from Barrington maintained his Outperform rating on Haemonetics Corporation (NYSE:HAE). He also revised his estimated price target upward from $90 to $93, implying an upside of almost 41%.
Petusky’s rating and target price adjustment came at the back of the company’s recent acquisition of Vivasure Medical, an Ireland-based advanced polymer implants and delivery systems manufacturer. The analyst sees this deal in a favorable light, which makes him optimistic about the stock performance.
Earlier, on December 17, Mizuho Securities analyst Anthony Petrone had also reaffirmed his Outperform rating on Haemonetics Corporation (NYSE:HAE), while increasing the price target from $75 to $90. His revisions now lead to an upside potential of over 36% from the current level.
Petrone’s revisions were part of Mizuho Securities’ adjustments across the medical devices and diagnostics space, in line with its 2026 outlook. The analyst noted that there is still room for valuations to expand further despite a rally witnessed post-Q3 announcements. He anticipates this “under a scenario where the dual AI + Cryptocurrency mega-trades remain influx with Healthcare positioned as the top defensive sector.”
Haemonetics Corporation (NYSE:HAE) offers hospital technology solutions and specializes in plasma and blood management. Some of the offerings include plasma collection systems, donor management services, and supporting software that cut down healthcare costs for patients, improve patient outcomes, and enhance blood product quality.
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