In this article, we will take a detailed look at the Goldman Sachs Healthcare Stocks: Top 10 Stock Picks.
The healthcare sector has been under pressure, underperforming the S&P 500 over the past several years. The Health Care Select Sector SPDR ETF (XLV) is down approximately 58% from its 2020 highs, underscoring its underperformance. In addition, the sector has underperformed by 23.7% since the tariff-induced lows of April 8, whereas the overall market has rebounded.
According to Michael Khouw, Chief Strategist at OpenInterest.PRO, the underperformance is the widest margin in a decade. Amid underperformance, healthcare stocks are trading at a significant discount, with the sector’s 2025 price-to-earnings ratio dropping to 14, compared to the 10-year average of 18.
Analysts at Deutsche Bank believe a turnaround is around the corner. According to analyst Pito Chickering, the selloff has left healthcare stocks ready for a relief rally as soon as budget policy becomes clearer.
“The stocks have effectively been dead money and trading within a narrow band,” he wrote in a research note. “Over the coming months, we expect incremental clarity on the federal budget that will give investors’ confidence Medicaid’s worst-case scenario won’t happen.”
If history is anything to go by, then healthcare stocks could be in for a bounce back, as they tend to outperform in the first year of a Republican presidential term.
With that in mind, let’s look at the Goldman Sachs Healthcare Stocks: Top 10 Stock Picks.
A healthcare professional in front of a computer monitor analysing the results of a new prognosis prediction test.
Our Methodology
To compile the list of the Goldman Sachs Healthcare Stocks: Top Stock Picks, we scanned the Goldman Sachs’ investment portfolio. We settled on the investment bank’s top healthcare picks. We also settled on stocks popular in elite hedge funds and detailed their upside potential. Finally, we ranked these stocks in ascending order based on Goldman Sachs’ Equity Stakes, as of Q1 2025.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Goldman Sachs Healthcare Stocks: Top Stock Picks
10. Gilead Sciences, Inc. (NASDAQ:GILD)
Goldman Sachs Equity Stake: $760.39 Million
Number of Hedge Fund Holders: 79
Gilead Sciences, Inc. (NASDAQ:GILD) is one of Goldman Sachs’ top healthcare stock picks. On July 10, the company announced it had reached an agreement with the Global Fund to Fight Aids, Tuberculosis, and Malaria. Under the agreement, the company is to make available its twice-a-year HIV pre-exposure prophylactic Yeztugo accessible to low- and middle-income countries.
It marks the first time that preventive HIV medicine will become available to low and middle-income countries, as is the case in high-income countries. As Gilead makes the drug available, the nonprofit is to select beneficiary countries based on HIV programs available in the places.
The FDA approved Gilead’s Yeztugo, a twice-yearly injection, last month. The approval is seen as a significant win for the company, with analysts insisting it has the potential to redefine the PrEP market. The drug is currently priced at $28,218 for a year’s worth of shots, and waiting to see if the company will offer the nonprofit organization a profit.
Gilead Sciences, Inc. (NASDAQ:GILD) is a biopharmaceutical company that discovers, develops, and commercializes medicines in the areas of unmet medical need. It develops medicines to prevent and treat life-threatening diseases, including HIV, viral hepatitis, and cancer.
9. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)
Goldman Sachs Equity Stake: $840.97 Million
Number of Hedge Fund Holders: 60
Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is one of Goldman Sachs’ top healthcare stock picks. On July 1, the European Commission approved the company’s new cystic fibrosis treatment, ALYFTREK (deutivacaftor/tezacaftor/vanzacaftor) for treating cystic fibrosis.
The approval comes on the basis of ALYFTREK demonstrating non-inferiority compared to the existing treatment, KAFTRIO, in terms of lung function measurement.
“Deutivacaftor/tezacaftor/vanzacaftor has shown it can deliver greater reductions in sweat chloride compared to standard of care,” said Professor Marcus A. Mall of Charité Universitätsmedizin Berlin, according to the press release statement.
With the approval, Vertex Pharmaceuticals stands to target over 31,000 people struggling with cystic fibrosis across the European Union. It will represent the broadest label for the medicine expected to strengthen the revenue base. The company has delivered a 9% revenue growth over the past 12 months.
Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is a biotechnology company that discovers, develops, and manufactures transformative medicines for people with serious diseases. It focuses on areas of cystic fibrosis, sickle cell disease, beta thalassemia, and acute pain while exploring treatments for type 1 diabetes and kidney disease.
8. AstraZeneca PLC (NASDAQ:AZN)
Goldman Sachs Equity Stake: $865.97 Million
Number of Hedge Fund Holders: 56
AstraZeneca PLC (NASDAQ:AZN) is one of Goldman Sachs’ top healthcare stock picks. On July 4, the company secured regulatory approval for Imfinzi (durvalumab). The approval is for the use of the drug for the treatment of muscle-invasive bladder cancer (MIBC).
The regulatory approval by the European Commission follows a positive opinion by the Committee for Medicinal Products for Human Use. It also comes on the heels of the company delivering positive results from the NIAGARA Phase III trial.
“The NIAGARA results showed how this regimen reduced the risk of recurrence by nearly a third and significantly extended survival, underscoring its potential to transform clinical practice in this curative-intent setting,” Dr. Michiel Van der Heijden, medical oncologist and Group Leader at the Netherlands Cancer Institute, and investigator in the NIAGARA trial, said.
With the regulatory approval, AstraZeneca stands to target over 30,000 people in the five major European countries struggling with respectable muscle-invasive bladder cancer (MIBC).
AstraZeneca PLC (NASDAQ:AZN) is a biopharmaceutical company focused on the discovery, development, and commercialization of prescription medicines. It operates in key therapeutic areas, including oncology, cardiovascular, renal, and metabolic diseases, as well as respiratory, immunology, and rare diseases.
7. Thermo Fisher Scientific Inc. (NYSE:TMO)
Goldman Sachs Equity Stake: $1.2 Billion
Number of Hedge Fund Holders: 101
Thermo Fisher Scientific Inc. (NYSE:TMO) is one of Goldman Sachs’ top healthcare stock picks. On June 25, the company confirmed it had inked a strategic partnership with Adial Pharmaceuticals (NASDAQ:ADIL).
Under the terms of the agreement, Thermo Fisher is to become the Contract Development and Manufacturing Organization (CDMO) for AD04 Drug products. The product is being developed as a targeted therapeutic agent for the treatment of Alcohol Use Disorder.
On the other hand, Cambrex is to become the drug substance CDMO and supplier of Ondansetron API. The agreements cover all phases of manufacturing for both clinical supplies for ADO4. In addition, the agreements mark the initial steps AS Adial Pharmaceutical plants to conduct ADO4 clinical trials.
“The combination of Thermo Fisher and Cambrex makes for a strong collaboration for Adial in our quest to develop AD04 for the treatment of AUD. Choosing a contract manufacturer that can meet our timelines for starting the clinical program is paramount,” Cary Claiborne, President and Chief Executive Officer of Adial, commented.
Thermo Fisher Scientific Inc. (NYSE:TMO) is a healthcare company that provides analytical instruments, specialty diagnostics, laboratory equipment, pharmaceutical and biotechnology services, and clinical development solutions.
6. Intuitive Surgical Inc. (NASDAQ:ISRG)
Goldman Sachs Equity Stake: $1.36 Billion
Number of Hedge Fund Holders: 106
Intuitive Surgical Inc. (NASDAQ:ISRG) is one of Goldman Sachs’ top healthcare stock picks. On July 10, the company secured Food & Drug Administration approval for its new Vessel Sealer Curved. The electrosurgical instrument is designed for use with multiport da Vinci systems and represents a significant development in surgical technology.
Vessel Sealer Curved is an Intuitive Surgical’s advanced energy instrument approved for lymphatic vessel transection. It stands out due to its curved jaw design, which allows surgeons to navigate tight anatomical spaces and work around critical structures effectively. It also combines multiple functions, including sealing, cutting, grasping, and dissecting tissue.
“We designed Vessel Sealer Curved to give surgeons greater precision in narrow anatomical spaces,” said Iman Jeddi, PhD, senior vice president and general manager, da Vinci platforms & product operations. “By combining the trusted performance of Vessel Sealer Extend with a slimmer, curved jaw profile, we’re helping surgeons work more efficiently and confidently across a wide range of procedures.”
The new surgical tool aligns with the company’s three-decade focus on improving minimally invasive procedures. Consequently, it should help the company maintain its leadership position in robotic surgery, having already reported over 17 million da Vinci procedures.
Intuitive Surgical Inc. (NASDAQ:ISRG) is a healthcare company that develops, manufactures, and markets robotic-assisted surgical systems, primarily the da Vinci surgical system. Its primary goal is to make surgery more effective, less invasive, and easier for surgeons, patients, and their families.
5. Boston Scientific Corporation (NYSE:BSX)
Goldman Sachs Equity Stake: $1.41 Billion
Number of Hedge Fund Holders: 108
Boston Scientific Corporation (NYSE:BSX) is one of Goldman Sachs’ top healthcare stock picks. On July 7, Boston Scientific (NYSE:BSX) saw its shares rise as TD Cowen reaffirmed its Buy rating and $115 price target following FDA approval to expand the use of its Farapulse system for treating persistent atrial fibrillation (AFib).
Previously approved for paroxysmal AFib, the system showed strong safety and efficacy results in clinical trials, with no strokes and over 85% of patients free from arrhythmia recurrence after one year.
The company sees significant growth potential in persistent AFib, which accounts for 25–50% of cases and anticipates further regulatory approvals in Europe, Japan, and China. Boston Scientific is also advancing new clinical research with the ReMatch trial, highlighting its continued innovation in cardiac care solutions.
Boston Scientific Corporation (NYSE:BSX) is a medical technology company that develops, manufactures, and markets medical devices. Its products are used in various interventional medical specialties to improve patient outcomes and address unmet needs.
4. Johnson & Johnson (NYSE:JNJ)
Goldman Sachs Equity Stake: $1.93 Billion
Number of Hedge Fund Holders: 91
Johnson & Johnson (NYSE:JNJ) is one of Goldman Sachs’ top healthcare stock picks. On July 10, analysts at Wolfe Research reiterated an ‘Outperform’ rating on the stock and a $175 price target. The bullish stance underscores the company’s strong performance year to date amid soaring regulatory concerns.
The stock is up by more than 8% year-to-date, outperforming the S&P 500, which is up by approximately 6%. The research firm expects the stock to continue its impressive run, especially with the settling of the talc litigation in the third quarter. An update on the litigation should alleviate concerns and mitigate the long-term impact on the stock.
In addition, Wolfe Research is bullish on Johnson & Johnson, as the estimated $400 million tariff impact is poised to be reduced by half. The company is on course to deliver $22.8 billion in revenues in the second quarter, in line with consensus estimates. Full-year revenues are expected at $91.9 billion, slightly above consensus estimates of $91.4 billion. Strong performance in Tremfya and Darzalex is expected to continue offsetting the slowdown in Stelara’s sales growth.
Johnson & Johnson (NYSE:JNJ) is a healthcare company focused on developing and producing pharmaceutical products and medical devices. It develops and delivers innovative medicines to treat a range of diseases, including oncology, immunology, neuroscience, and cardiopulmonary conditions.
3. AbbVie Inc. (NYSE:ABBV)
Goldman Sachs Equity Stake: $2.96 Billion
Number of Hedge Fund Holders: 86
AbbVie Inc. (NYSE:ABBV) is one of Goldman Sachs’ top healthcare stock picks. On July 10, the stock jumped 3.4% on the confirmation of an exclusive licensing deal with IGI Therapeutics. The agreement is for lead asset ISB 2001, which targets oncology and autoimmune diseases.
Under the terms of the agreement, AbbVie has secured rights to develop, manufacture, and commercialize the treatment option across North America, Europe, Japan, and Greater China. In return, the company is to pay $700 million to IGI Therapeutics to secure the rights.
“Multispecifics including trispecific antibodies represent a new frontier in immuno-oncology with the potential to deliver deeper, more durable responses by engaging multiple targets simultaneously,” said Roopal Thakkar, M.D., executive vice president of research and development and chief scientific officer at AbbVie.
While the company will also incur milestone payments totaling $1.225 billion, the acquisition is poised to bolster its pipeline of drugs. The acquisition of ISB 2001 rights paves the way for AbbVie to expand and strengthen its oncology portfolio. The asset has the potential to address unmet needs in the treatment of multiple myeloma.
AbbVie Inc. (NYSE:ABBV) is a biopharmaceutical company dedicated to discovering, developing, and commercializing innovative medicines and solutions that address complex health issues. It advances therapies in areas of immunology, oncology, neuroscience, and virology.
2. UnitedHealth Group Incorporated (NYSE:UNH)
Goldman Sachs Equity Stake: $3.06 Billion
Number of Hedge Fund Holders: 139
UnitedHealth Group Incorporated (NYSE:UNH) is one of Goldman Sachs’ top healthcare stock picks. On July 10, Wolfe Research reiterated an ‘Outperform’ rating on the stock. However, the research firm lowered its price target to $330 from $363, citing the medical billing pressures the company is facing.
The research firm has since revised the company’s 2025 earnings estimate to $18. The revision underscores a more conservative view as UnitedHealth faces industry pressures in Medicaid and health insurance exchanges. The research firm views Optum Health and Medicare Advantage as units facing significant earnings pressure.
According to Wolfe Research, UnitedHealth is generating 1% margins in Mediocre Advantage, which is below its long-term margins. The company is expected to update its 2025 earnings guidance and shed light on its earnings trajectory amid the pressures from medical insurance billing.
UnitedHealth Group Incorporated (NYSE:UNH) is a healthcare company that offers consumer-oriented health benefit plans and services. It also provides care delivery, care management, wellness, and consumer engagement, as well as health financial services to patients.
1. Eli Lilly and Company (NYSE:LLY)
Goldman Sachs Equity Stake: $4.40 Billion
Number of Hedge Fund Holders: 119
Eli Lilly and Company (NYSE:LLY) is one of Goldman Sachs’ top healthcare stock picks. On July 9, the company confirmed the approval by the US Food and Drug Administration of a label update for its once-monthly amyloid-targeting therapy for adults with early symptomatic Alzheimer’s disease (AD).
The new label significantly reduces the incidence of amyloid-related amyloid-related imaging abnormalities with edema/effusion. The company expects the new label update for Kisunla to enhance the way healthcare professionals evaluate treatment options for parents.
“This update underscores our unwavering commitment to patient safety and the advancement of Alzheimer’s disease treatment by potentially mitigating the risk of ARIA-E,” stated Brandy Matthews, MD, FAAN, Lilly’s Vice President of Global & US Medical Affairs for Alzheimer’s Disease.
The FDA has approved a more gradual titration that reduces the incidence of ARIA-E by 41% at 24 weeks and by 35% at 52 weeks compared to the original dosing schedule. It should result in lower rates of ARIA-E without compromising Kisunla’s ability to reduce amyloid plaque or Kisunla’s once-monthly dosing. Eli Lilly will now offer patients and the care team confidence in the safety of Kisunla in reducing amyloid.
Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company that discovers, develops, manufactures, and sells human healthcare products. It specializes in a wide range of therapeutic areas, including diabetes, oncology, immunology, and neuroscience.
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