In this article, we will examine the 15 Best Biotech Stocks to Buy According to Wall Street Analysts.
The biotech sector has been a disaster for investors over the past five years going by a 14% decline compared to an 86% gain for the S&P 500 over the same period. Fast forward, sentiments and outlook have improved significantly over the past year. The S&P 500 Biotech index is up by 32% year to date, outperforming the overall market.
The prospects of further interest rate hikes are already giving investors optimism about a recovery in the sector. Interest rate cuts are the catalyst behind investors rushing back to riskier corners of the market with a focus on high-risk, high-reward opportunities in the biotechnology sector.
Clinical-stage biotech companies are among the biggest gambles in the market. That’s because companies burn through cash faster than they can raise it. Consequently, they tend to thrive whenever the US Federal Reserve cuts rates.
“With the potential for interest rates to be cut more, you’re going to see a loosening up, especially with the biotech sector sentiment getting slightly better,” said Hartaj Singh, founding partner of Tecumseh Partners.
Lower borrowing costs should be a boon for the biotechnology sector, as was the case during the pandemic, when the Fed cut rates to all-time lows.
“Usually the first three to six months of a rate cycle aren’t necessarily a positive for biotech stocks,” said Mike Perrone, a health-care specialist at Baird. But “this could be a little bit different because it feels like the economy’s in a better place than it usually is by the time we cut rates.”
Optimism that the President Donald Trump administration will ease regulations is another factor fuelling sentiments around biotech stocks. With that in mind, let’s take a look at some of the best biotech stocks to buy according to Wall Street analysts.
Our Methodology
To compile the list of Best Biotech Stocks to Buy According to Wall Street Analysts, we used Finviz Screener to identify biotechnology stocks. We focused on stocks with an upside potential of more than 30% (as of December 10) and detailed the number of hedge funds holding stakes in them in the third quarter of 2025. Finally, we ranked the stocks in ascending order based on their upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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).
Best Biotech Stocks to Buy According to Wall Street Analysts
15. Disc Medicine, Inc. (NASDAQ:IRON)
Stock Upside Potential: 31.24%
Number of Hedge Fund Holders: 34
Disc Medicine Inc. (NASDAQ: IRON) is one of the best biotech stocks to buy according to Wall Street analysts. On December 8, Leerink Partners raised its price target of the stock to $115 from $110 while reiterating an Outperform rating.
The price target hike comes after the US Food and Drug Administration accepted the company’s New Drug Application for its lead asset, bitopertin, an oral GlyT-1 inhibitor for erythropoietic protoporphyria (EPP). The company posted topline interim data in the Phase 2 RALLYMF trial in patients with myelofibrosis anemia. The research firm remains confident in the candidate drug’s prospects, with a high probability of success for DISC-0974 in myelofibrosis. Consequently, it has raised the company’s revenue forecast to about $748 million from $359 million.
Analysts at Raymond James have also echoed similar sentiments on raising the stock’s price target to $117 from $108 while reiterating a Strong Buy rating. The price target hike is in response to topline interim data from the RALLY-MF Phase 2 trial in patients with Myelofibrosis (MF) and Anemia presented at ASH 2025.
Disc Medicine, Inc. (NASDAQ:IRON) is a clinical-stage biopharmaceutical company focused on creating new treatments for serious blood (hematologic) diseases by targeting red blood cell biology, specifically heme production and iron balance.
14. Caris Life Sciences, Inc. (NASDAQ:CAI)
Stock Upside Potential: 41.18%
Number of Hedge Fund Holders: 32
Caris Life Sciences Inc. (NASDAQ:CAI) is one of the best biotech stocks to buy according to Wall Street analysts. On December 4, 2025, Caris Life Sciences (NASDAQ:CAI) announced it will present 19 breast cancer studies at the San Antonio Breast Cancer Symposium, conducted with more than 40 partner institutions through the Caris Precision Oncology Alliance. Spanning seven disease subtypes, the work showcases how Caris’ multi-omic tumor profiling, AI-driven signatures, and biomarker discovery improve recurrence prediction, risk stratification, and outcomes. Executives highlighted the company’s leadership in integrating exome and transcriptome sequencing with IHC profiling, with two studies chosen for oral presentation underscoring its advances in personalized cancer care.
Earlier on December 2, analysts at Cannaccord Genuity initiated coverage of the stock with a Hold rating and a $28 price target. The company remains in a strong position in the precision oncology market, owing to its differentiated multi-modal platform and early momentum in tissue and blood-based therapy selection.
Likewise, the company’s dual-modality infrastructure and robust data assets also affirm its prospects in oncology, backed by an expanding artificial intelligence suite. Consequently, the company posted a 113% increase in Q3 revenue to $216.8 million. It also posted a positive adjusted EBITDA of $51.2 million, affirming improved operational efficiency.
Caris Life Sciences, Inc. (NASDAQ:CAI) is a precision medicine company focused on oncology that offers advanced tumor profiling to help doctors personalize cancer treatment by analyzing a tumor’s unique molecular signature to guide therapy, find clinical trials, and predict drug effectiveness.
