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.
11. LivaNova PLC (NASDAQ:LIVN)
Number of Hedge Fund Holders: 37
LivaNova PLC (NASDAQ:LIVN) is one of the 12 best Medical Devices stocks to invest in according to Hedge Funds.
On January 26, Brett Fishbin from KeyBanc Capital Markets revised his rating on LivaNova PLC (NASDAQ:LIVN), from Sector Weight to Overweight. The analyst estimated a target price of $81 for the stock, yielding an upside of almost 27%.
Fishbin’s rating upgrade is part of KeyBanc’s 2026 outlook on the Medical Technology segment. The firm sees underlying trends within the segment to remain sustainable during the coming year, and also highlighted that the segment’s valuation premium has almost disappeared. This makes up for a compelling stock picking scenario that will be backed further by a higher level of capital markets activity.
Earlier, on January 9, Goldman Sachs analyst David Roman reaffirmed his Neutral rating on LivaNova PLC (NASDAQ:LIVN), while increasing the price target from $56 to $66. He anticipates more aligned valuations relative to fundamentals during 2026, after significant divergence observed during the previous year.
LivaNova PLC (NASDAQ:LIVN) is a medical technology company that develops and sells cardiovascular and neuromodulation solutions. Its cardiopulmonary segment offers heart-lung machines, oxygenators, perfusion tubing systems, cannulae, and other related accessories. The other segment, Neuromodulation, provides VNS therapy systems and devices used for neuromodulation therapies.
10. iRhythm Holdings (NASDAQ:IRTC)
Number of Hedge Fund Holders: 43
iRhythm Holdings (NASDAQ:IRTC) is one of the 12 best Medical Devices stocks to invest in according to Hedge Funds.
On January 12, Morgan Stanley maintained its Overweight rating on iRhythm Holdings (NASDAQ:IRTC). The firm assigned a price target of $205, which represents a 35% upside from the current level.
The rating came after iRhythm Holdings (NASDAQ:IRTC) announced its preliminary results for the fourth quarter, posting revenues of around $207 million amid volumetric growth. This represented outperformance relative to consensus estimates, which stood at $200 million. As per the company’s 2026 guidance, midpoint revenues are projected at around $875 million, which, according to Morgan Stanley, does not include expected numbers from iRhythm’s next-generation Mobile Cardiac Telemetry (MCT) device.
Earlier on January 5, Vijay Kumar from Evercore ISI had also revised his rating for iRhythm Holdings (NASDAQ:IRTC), to Outperform. He adjusted his price target estimate from $194 to $210, which now offers an upside potential above 38% from the prevailing level.
iRhythm Holdings (NASDAQ:IRTC) is a digital healthcare company that develops and commercializes device-based Zio biosensor technology for diagnosing cardiac arrhythmias. It offers both long-term and short-term cardiac monitoring services, as well as mobile cardiac telemetry monitoring. The company also incorporates AI-based data analytics in its operations.
9. Bruker Corporation (NASDAQ:BRKR)
Number of Hedge Fund Holders: 50
Bruker Corporation (NASDAQ:BRKR) is one of the 12 best Medical Devices stocks to invest in according to Hedge Funds.
On January 26, Guggenheim analyst Subbu Nambi reiterated her Buy rating on Bruker Corporation (NASDAQ:BRKR). She revised her price target from $53 to $58, which leads to an upside potential of almost 25%.
Nambi’s target price adjustment is part of Guggenheim’s revisions to its forecasts and targets for many of the stocks within the Diagnostics and Life Sciences Tools category. These changes are based on recent updates and some preliminary results for the fourth quarter.
Earlier, on January 7, Daniel Brennan of TD Cowen reaffirmed his Hold rating on Bruker Corporation (NASDAQ:BRKR), and simultaneously revised his price target from $42 to $53.
Brennan’s rating was also a part of his firm’s broader adjustments across the Life Science Tools segment, based on the outlook for the fourth quarter. The analyst noted that many companies have “already soft guided” 2026, which keeps him optimistic for the coming year.
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).
8. Insulet Corporation (NASDAQ:PODD)
Number of Hedge Fund Holders: 56
Insulet Corporation (NASDAQ:PODD) is one of the 12 best Medical Devices stocks to invest in according to Hedge Funds.
As of the close of play on January 28, Insulet Corporation (NASDAQ:PODD) carried a highly bullish consensus view. The stock received coverage from 18 analysts and was assigned 16 Buy ratings and 1 Hold rating. With just 1 Sell rating, it has a consensus 1-year median price target of $369.59, offering more than 43% upside potential from the prevailing level.
On January 9, David Roman from Goldman Sachs also reaffirmed his optimism around Insulet Corporation (NASDAQ:PODD). He assigned a Buy rating to the stock and lowered his price target from $388 to $365. Despite the downward revision, he still sees more than 41% upside potential, which he expects will be in line with company fundamentals. The analyst noted that during 2025, share price movements had diverged from underlying fundamentals. However, during the coming year, he expects valuations to remain closely tied to organic growth prospects.
Insulet Corporation (NASDAQ:PODD) focuses on manufacturing and selling insulin management systems through the Omnipod platform. It offers a disposable tubeless pump called Omnipod Insulin Management System, whose design is specific to insulin-dependent diabetes. The company’s strategy revolves around high-volume automated manufacturing in the US and Malaysia, and contract manufacturing in China.
7. GE HealthCare Technologies (NASDAQ:GEHC)
Number of Hedge Fund Holders: 58
GE HealthCare Technologies (NASDAQ:GEHC) is one of the 12 best Medical Devices stocks to invest in according to Hedge Funds.
On January 9, David Roman from Goldman Sachs reiterated his Buy rating for GE HealthCare Technologies (NASDAQ:GEHC). The analyst also raised his price target from $86 to $98, implying nearly 24% upside for investors.
On January 5, Vijay Kumar of Evercore ISI also expressed a bullish stance on GE HealthCare Technologies (NASDAQ:GEHC). He maintained an Outperform rating on the stock and anticipated nearly 20% upside from the prevailing level. This upside is based on Kumar’s upward revision of the price target from $92 to $95.
Kumar noted that 2026 is set to offer interesting prospects given a visible recovery across end markets, along with sector rotation strategies. For the medical technology space, he expects strong capital expenditure trends next year, which will be supported by recovery indicators in China.
GE HealthCare Technologies (NASDAQ:GEHC) operates within pharmaceutical diagnostics and medical technology spaces. With a focus on precision care, it develops and markets products along with additional services that are used in diagnosis, treatment and monitoring of patients. It is structured in four segments: Advanced Visualization Solutions (AVS), Imaging, Patient Care Solutions (PCS), and Pharmaceutical Diagnostics (PDx).
6. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Holders: 58
Medtronic plc (NYSE:MDT) is one of the 12 best Medical Devices stocks to invest in according to Hedge Funds.
As of January 28 closing, sentiment for Medtronic plc (NYSE:MDT) was moderately bullish. The stock had been covered by 19 analysts, who issued 10 Buy ratings and 9 Hold ratings. It carried a median 1-year price target of $111.63, resulting in almost 11% upside potential from the current level.
Back on January 5, Piper Sandler maintained a Neutral rating for Medtronic plc (NYSE:MDT), with a price target of $105. The rating came after the firm carried out a survey of 25 physicians to analyze renal denervation (RDN) procedure volumes and expected device usage in the future.
Survey results indicated that the average expected volumes per physician for 2026 are below Piper Sandler’s expectations. Hence, the firm currently has a cautious forecast regarding RDN-linked growth potential for the business, which it expects will drive the topline by only an incremental 30 basis points.
Medtronic plc (NYSE:MDT) is a healthcare technology company that develops and sells medical devices and therapies. It covers more than 70 chronic diseases and sells therapies to healthcare networks, clinicians, and physicians, as well as directly to patients. The business operates with four segments, i.e., Cardiovascular, Diabetes, Medical-Surgical, and Neuroscience.
5. Edwards Lifesciences Corporation (NYSE:EW)
Number of Hedge Fund Holders: 64
Edwards Lifesciences (NYSE:EW) is one of the 12 best Medical Devices stocks to invest in according to Hedge Funds.
On January 20, Adam Maeder from Piper Sandler maintained his Overweight rating on Edwards Lifesciences (NYSE:EW). The analyst also adjusted his price target on the stock from $95 to $98, which now yields almost 20% upside.
Maeder’s revision came after Piper Sandler made adjustments to some of its forecast models, following preliminary fourth-quarter results. These adjustments also incorporate 2026 guidance from the underlying management teams.
Back on January 9, Josh Jennings from TD Cowen upgraded his rating on Edwards Lifesciences (NYSE:EW) from Hold to Buy. The analyst also raised his price target on the stock from $90 to $97, implying 18.5% upside.
Jennings sees a renewed growth cycle the company has entered, driven primarily by the expansion of the transcatheter aortic valve replacement (TAVR) indication. He also attributed his favorable outlook to a strong pipeline of new launches scheduled during the coming year.
Edwards Lifesciences Corporation (NYSE: EW) is a medical technology company that develops patient-focused medical products and technologies to treat critical cardiovascular diseases. It also offers critical care monitoring services along with transcatheter heart valve repair & replacement products. Its surgical structural heart solutions include INSPIRIS aortic surgical valve, INSPIRIS RESILIA aortic valve, KONECT RESILIA, and MITRIS RESILIA valve.
4. Abbott Laboratories (NYSE:ABT)
Number of Hedge Fund Holders: 68
Abbott Laboratories (NYSE:ABT) is one of the 12 best Medical Devices stocks to invest in according to Hedge Funds.
On January 23, Larry Biegelsen from Wells Fargo maintained an Overweight rating on Abbott Laboratories (NYSE:ABT). However, the analyst lowered the target price on the stock from $146 to $122. Following this, the stock now offers an upside potential of 15% from the current level.
Biegelsen noted some transitory headwinds faced by the business, due to which the company missed consensus sales estimates for the fourth quarter. Although the management has provided guidance of 6.5%-7.5% organic growth in sales during 2026, it still remains below the prior consensus. The analyst attributed these estimates to Nutrition headwinds that are likely to persist during the first half of the year.
On January 23, Joanne Wuensch from Citi also reiterated his Buy rating for Abbott Laboratories (NYSE:ABT) and cut his target price from $155 to $140. This revision follows the company’s Q4 announcement, and the analyst highlighted the need for improved results going forward for the stock to regain momentum.
Abbott Laboratories (NYSE:ABT) is a leading name in the healthcare industry that is involved in discovering, developing, and marketing healthcare products across the globe. The business is segregated into four segments, i.e., Diagnostic Products, Established Pharmaceutical Products, Medical Devices, and Nutritional Products.
3. DexCom Inc (NASDAQ:DXCM)
Number of Hedge Fund Holders: 71
DexCom Inc (NASDAQ:DXCM) is one of the 12 best Medical Devices stocks to invest in according to Hedge Funds.
As of the January 28 closing, DexCom Inc. (NASDAQ:DXCM) had highly bullish sentiment according to consensus. Out of 22 analysts who covered the stock, 18 assigned Buy ratings and 3 gave Hold calls. With just 1 Sell rating, the stock carries a median 1-year price target of $85.56, implying almost 17% upside for investors.
On January 12, Morgan Stanley reiterated its Overweight rating on DexCom Inc (NASDAQ:DXCM) with a price target of $75. The rating follows the company’s preliminary announcement of fourth-quarter results, reporting U.S. revenues of $892 million and international revenues of $368 million. This results in a year-over-year topline growth of 11% and 18%, respectively, beating consensus estimates by almost 2% points.
For FY 2025, management is expecting an adjusted gross margin of around 61% and an adjusted operating margin of roughly 20%-21%. For 2026, the business is expected to generate between $5.16 billion and $5.25 billion in revenue, with an adjusted gross margin of 63-64% and an adjusted operating margin in the range of 22%-23%.
DexCom Inc (NASDAQ:DXCM) is a medical device company that sells continuous glucose monitoring (CGM) systems. These systems efficiently manage diabetes and metabolic conditions by tracking glucose levels every few minutes. Some of its products include DexCom G6, DexCom G7, DexCom Share, DexCom Real-Time API, and DexCom ONE.
2. Stryker Corporation (NYSE:SYK)
Number of Hedge Fund Holders: 72
Stryker Corporation (NYSE:SYK) is one of the 12 best Medical Devices stocks to invest in according to Hedge Funds.
On January 27, Matthew O’Brien from Piper Sandler reiterated his Overweight rating on Stryker Corporation (NYSE:SYK) with a price target of $420. His target price estimate represents over 17% upside for investors.
O’Brien shed light on the company’s new handheld orthopedic robot, identified as Mako RPS, after connecting with a physician who had seen the product. According to the initial study, this new device will enable the company to establish its presence in lower-cost markets, including ambulatory surgical centers and select international markets. This will help the business compete with Zimmer Biomet and its THINK Surgical partner in specific segments.
Back on January 5, Evercore ISI also maintained an Outperform rating on the stock while lowering the target price from $405 to $390. The firm attributed its rating to observed recoveries across end markets, along with expectations of healthy capital expenditures during 2026 within the medical technology space.
Stryker Corporation (NYSE:SYK) is a medical technology company, structured into 2 segments, i.e., MedSurg & Neurotechnology, and Orthopaedic. The company aims to offer innovative products and solutions across these areas to improve patient outcomes. Some of its offerings include surgical equipment, navigation systems, endoscopic and communications systems, emergency medical equipment, thoracolumbar systems, interbody systems, and degenerative therapies.
1. Boston Scientific Corporation (NYSE:BSX)
Number of Hedge Fund Holders: 102
Boston Scientific Corporation (NYSE:BSX) is one of the 12 best Medical Devices stocks to invest in according to Hedge Funds.
On January 16, Richard Newitter from Truist Securities reiterated his Buy rating on Boston Scientific Corporation (NYSE:BSX). He set a price target of $120, implying almost 28% upside.
The analyst attributed his rating to the company’s strategic acquisition of Penumbra (PEN), which he believes will bolster the business’s durability. Moreover, this deal will also back the company’s double-digit revenue and EPS growth prospects for the future. He also acknowledged the timing of this transaction, which happened as the company’s electrophysiology growth is becoming sluggish, and before the CHAMPION catalyst that entails binary risks.
According to Investing.com, on January 15, Morgan Stanley reiterated its positive view on Boston Scientific Corporation (NYSE:BSX) following the Penumbra deal. The investment bank sees some “clear catalysts” that make the stock valuation appear highly attractive at this point.
Boston Scientific Corporation (NYSE:BSX) specializes in medical devices for interventional specialties such as cardiovascular, endo-surgery, and neuro-modulation. The company operates through MedSurg and Cardiovascular segments, and offers a range of devices including biliary stent systems, electrocautery enhanced delivery systems, direct visualization systems, and single-use duodeno-scopes.
While we acknowledge the potential of BSX 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 BSX and that has 100x upside potential, check out our report about the cheapest AI stock.
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