10 Best Healthcare and Insurance Stocks To Buy Following the 2026 Democratic Midterm Sweep

Democratic victories in both chambers of Congress have lifted hopes of relief for health insurers and hospital operators, putting renewed attention on healthcare stocks favored by hedge funds.

8. Intuitive Surgical, Inc. (NASDAQ:ISRG)

Number of Hedge Fund Holders: 100

Intuitive Surgical, Inc. (NASDAQ:ISRG) continues to expand the use of robotic-assisted surgery. The company manufactures the da Vinci surgical platform and Ion robotic-assisted bronchoscopy system, with financial performance closely tied to procedure volumes and demand for its equipment and instruments. November month-to-date share-price performance through November 6, 2026, shows that the stock gained 4.81%.

In the third quarter of 2026, worldwide procedures across the two platforms increased approximately 15% year over year. Revenue rose 22% to $3.05 billion, supported by higher procedure volumes and system placements. Intuitive placed 546 da Vinci systems during the quarter, compared with 427 a year earlier. Its installed base reached 12,094 systems, an increase of 12% compared with the prior year period. For more insight, access our meticulously curated list of the 10 Best Healthcare Stocks to Buy According to Hedge Funds for free here.

However, GAAP net income declined to $523 million from $704 million. The company also recorded a $450 million pretax charge related to the proposed settlement of previously disclosed antitrust class-action litigation, making the headline earnings decline less representative of underlying operating activity. The settlement remains subject to court approval.

Investors need to consider the growing procedure volumes and system adoption as important measures of Intuitive’s commercial position. At the same time, litigation costs and capital requirements warrant attention when assessing profitability.

7. Merck & Co., Inc. (NYSE:MRK)

Number of Hedge Fund Holders: 101

The central investment challenge for Merck & Co., Inc. is becoming increasingly focused on the notion that the pharmaceutical company must develop a broader revenue base before its blockbuster cancer treatment Keytruda begins facing significant patent-related competition.

Merck’s third-quarter 2026 results demonstrated why Keytruda remains so important. Total quarterly sales increased 5% year over year to $18.1 billion, with Keytruda and Keytruda Qlex generating $8.6 billion, an increase of 6%. However, other medicines are beginning to contribute more meaningfully. The company reported that Winrevair, which treats pulmonary arterial hypertension, generated $694 million in sales, up 93% year over year. Merck’s animal health business also reported $1.7 billion in sales.

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The importance of this diversification extends beyond immediate revenue growth. Reuters reported that Merck is preparing for Keytruda’s US patent protections to begin expiring in 2028, while management expects newer medicines and pipeline developments to support the business over the following decade. It has plans to raise its revenue forecast from new products over the next decade, which is supported by acquisitions and recent successes in clinical trials.

Merck’s current earnings thus demonstrate the strength of its established portfolio, but the more consequential question is whether newer treatments can offset future pressure on Keytruda revenue.

6. Revolution Medicines, Inc. (NASDAQ:RVMD)

Number of Hedge Fund Holders: 105

Revolution Medicines, Inc. (NASDAQ:RVMD) has entered a new phase following the US approval and commercial launch of Rasonque, its treatment for certain patients with metastatic pancreatic cancer. The development transforms the company from a primarily research-focused biotechnology business into one with an approved commercial product. Its third-quarter 2026 results were particularly significant, showing that Rasonque generated $197.6 million in net product revenue despite being commercially available for only approximately five weeks following its August 26 approval.

However, the company cautioned that early sales included the effects of several factors, including patients transitioning from the U.S. Expanded Access Program (EAP), individuals awaiting an approved treatment, and initial distribution-channel stocking. These factors mean the first quarter’s sales should not be treated as representative of recurring demand.

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Revolution Medicines also reported a quarterly net loss of $407.5 million, compared with $305.2 million a year earlier. Research and development expenses increased substantially as the company continued expanding its oncology pipeline, going from $262.5 million in fiscal Q3 2025 to $417.1 million in fiscal Q3 2026.

Its financial position remains significant, with approximately $3.7 billion in cash, cash equivalents, and marketable securities at September 30. The commercial launch therefore provides meaningful validation of the company’s development efforts. Establishing sustainable demand and controlling the costs of commercial expansion remain separate challenges for the company.

5. Danaher Corporation (NYSE:DHR)

Number of Hedge Fund Holders: 108

Danaher Corporation (NYSE:DHR) provides exposure to healthcare through the tools and technologies used in scientific research, biotechnology manufacturing, and diagnostics. Its business is less directly tied to government insurance reimbursement than hospitals or managed-care companies, with performance depending substantially on spending by laboratories, pharmaceutical manufacturers, and healthcare customers.

The company’s third-quarter 2026 results demonstrated improving financial performance. Revenue increased 8.5% year over year to $6.6 billion, while net earnings rose 34.5% year over year to approximately $1.2 billion, or $1.71 per diluted common share.

However, reported revenue growth tells only part of the story. Danaher’s non-GAAP core revenue increased 3.0%, while core revenue excluding respiratory revenue increased 5.5%. This shows that acquisitions, changing diagnostic demand, and other adjustments affect comparisons between reporting periods. The company also generated $1.9 billion in operating cash flow and $1.6 billion in non-GAAP free cash flow.

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Although diagnostics reported substantial sales growth, its underlying core performance was considerably weaker than the headline increase, reflecting the different conditions across Danaher’s businesses. For investors, the improving cash generation and strength of its life-science operations provide evidence of operational progress, but sustained underlying growth across biotechnology and diagnostics remains more important than acquisition-driven increases in reported revenue.