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Healthcare Stocks Surge as Investors Rotate Away From Tech

MarketDash Editorial Team
19 days ago
After weeks of volatility, investors are shifting money from high-flying tech stocks into healthcare names. These six companies are riding strong momentum backed by solid earnings and technical breakouts.

The great rotation is here. After several volatile weeks watching tech stocks wobble, investors are making a decisive move into healthcare stocks that have been quietly waiting their turn. This isn't just money sloshing around randomly. The shift has both technical and fundamental legs to stand on, with healthcare earnings coming in strong and several stocks breaking into fresh uptrends.

Let's walk through six healthcare sector names that have been surging for compelling reasons and score exceptionally well on momentum rankings.

Cardinal Health Inc.: The Pharmaceutical Wholesaler Waking Up

Momentum Score: 88.62

We'll start with the heavyweights. Cardinal Health Inc. (CAH) is one of the "Big 3" pharmaceutical wholesalers alongside McKesson Corp. and Cencora Inc. With a $48 billion market cap, Cardinal has been generating more than $50 billion in sales every single quarter since the start of 2023. The business model is straightforward: sell generic and branded drugs to pharmacies and hospitals at scale.

The stock is up more than 70% year-to-date, but the momentum really kicked into high gear recently thanks to a standout quarterly report. CAH shares had been stuck in a tight range since July, trading sideways while investors waited for a catalyst. That catalyst arrived on October 30th when the Q3 earnings release sent shares up 15% in a single session.

Cardinal posted its first simultaneous top and bottom line beat since Q4 of last year, with earnings per share coming in more than 16% above what analysts expected. If you were watching the technical indicators, you might have seen this coming. The stock surged above its 50-day simple moving average in the weeks leading up to the release, a classic sign that something positive was brewing.

Guardant Health Inc.: Blood-Based Cancer Detection Takes Off

Momentum Score: 97.44

Guardant Health Inc. (GH) is another large-cap healthcare name riding a rally this month, though its specialty couldn't be more different from Cardinal's wholesale distribution. Guardant focuses on oncology diagnostics with an emphasis on blood-based cancer detection. The company's primary revenue driver is the Guardant360 system, which offers non-invasive screening tests capable of detecting more than 70 cancer-related gene mutations.

The company recently received FDA approval for its Guardant360 CDx companion diagnostic system, a breast cancer diagnostic tool that expands its market opportunity. Like Cardinal, Guardant's shares got a massive post-earnings boost from better-than-expected results. The company reported a narrower loss than analysts anticipated and $265 million in revenue, a quarterly record representing more than 38% year-over-year growth.

Here's what makes the chart interesting: the stock began trending upward several weeks before the results dropped. The support level jumped from the 200-day simple moving average to the 50-day simple moving average and held firm. A pullback to test previous support levels wouldn't be shocking from here, but the long-term uptrend looks promising for investors with patience.

Abivax SA: When Clinical Trials Go Very Right

Momentum Score: 99.88

Now let's jump into biotech territory with Abivax SA (ABVX), a French pharmaceutical developer focused on chronic inflammatory diseases. The company's flagship drug, obefazimod, is a treatment for moderate-to-severe ulcerative colitis currently working its way through clinical trials.

Abivax announced results from Phase 3 clinical trials in July, and if you're wondering how well those results were received, consider this: the stock gained nearly 600% in a single trading session. That's not a typo. When clinical trial results exceed expectations by that magnitude, the market reaction is swift and dramatic.

The upside potential in ABVX shares might not be fully priced in yet. The stock is up another 60% over the last three months following a wave of analyst price target increases, including a new high of $176 from Wolfe Research. Overall, the stock carries a consensus Buy rating from 15 analysts, with an average target price of $156 based on the three most recent upgrades. There's still room to run if the drug continues to progress smoothly.

Medpace Holdings Inc.: The Behind-the-Scenes Player

Momentum Score: 93.62

Companies like Abivax develop promising drugs, but they need companies like Medpace Holdings Inc. (MEDP) to test whether those drugs actually work. Medpace offers clinical trial services to pharmaceutical and medical device developers, essentially serving as the quality control infrastructure for the entire drug development industry.

The company's recent earnings performance has sparked a significant rally. Shares are up more than 75% year-to-date, and earnings beats have been the catalyst for two of the largest up days during this run. Medpace's Q2 2025 revenue exceeded expectations by nearly 12%, and the company followed up with another top and bottom line beat for Q3 when results landed on October 22nd.

Management reported Q3 revenue up more than 23% year-over-year and expects to quickly refill its 2026 backlog following some cancellations earlier this year. The technical picture looks solid too. The stock appears to be building upward momentum with consistent support along the 50-day simple moving average, which is exactly what momentum traders want to see.

Elanco Animal Health Inc.: Don't Forget the Furry Patients

Momentum Score: 89.21

Four-legged family members need healthcare too. Elanco Animal Health Inc. (ELAN) develops a range of food, medicines, and preventatives for both pets and farm animals. One of the company's most successful products is Simparica Trio, an oral medication for dogs that prevents ticks, fleas, roundworms, and a host of other parasites.

ELAN shares are up 76% this year, and once again, the rally is grounded in actual earnings performance rather than speculation about potential future profits. Elanco's Q3 earnings exceeded both top and bottom-line expectations, and the company raised full-year guidance with both the Pet Health and Farm Animal divisions reporting double-digit year-over-year sales growth.

Despite the positive earnings news, ELAN shares are down over the last month and have pulled back to the 50-day simple moving average. However, that moving average has been a key bounce support level throughout this rally. This could present a solid entry point for new investors, especially considering the RSI has dropped to its lowest level since August. Sometimes the best buying opportunities come during temporary weakness in otherwise strong uptrends.

GeneDx Holdings Corp.: Genome Testing Finds Its Footing

Momentum Score: 93.18

GeneDx Holdings Corp. (WGS) specializes in exome and genome testing, a still relatively speculative corner of the healthcare industry that has only recently started generating consistent profits. But here's what makes GeneDx interesting: it's a consistent winner during earnings season.

Results posted last month included a substantial guidance raise for both total revenue and adjusted gross margins. The company's market cap is now approaching $4 billion following back-to-back quarters with $100 million in sales. That's a meaningful milestone for a company that was burning cash not too long ago.

WGS shares have been volatile over the last three months, with buyers and sellers in a fairly evenly matched tug-of-war. However, the stock is bouncing off the 50-day simple moving average again, which has proven to be a reliable support level. For investors comfortable with a bit more volatility, this could represent another buying opportunity in a name with strong growth fundamentals.

The Bigger Picture

What ties these six companies together isn't just strong momentum scores. It's the combination of solid fundamental performance meeting technical breakouts at exactly the right moment. When earnings consistently beat expectations and stocks find reliable support at key moving averages, that's when momentum strategies tend to work best.

The rotation out of tech and into healthcare isn't happening in a vacuum. These healthcare names are delivering the goods with real revenue growth, margin expansion, and in many cases, better-than-expected profitability. That's the kind of foundation that can sustain a rally beyond just a few weeks of enthusiasm.

Whether this rotation has staying power depends on whether these companies can continue executing on their earnings. But for now, the combination of technical and fundamental tailwinds is creating genuine opportunities in a sector that spent years playing second fiddle to tech darlings.

Back to News

Healthcare Stocks Surge as Investors Rotate Away From Tech

MarketDash Editorial Team
19 days ago
After weeks of volatility, investors are shifting money from high-flying tech stocks into healthcare names. These six companies are riding strong momentum backed by solid earnings and technical breakouts.

The great rotation is here. After several volatile weeks watching tech stocks wobble, investors are making a decisive move into healthcare stocks that have been quietly waiting their turn. This isn't just money sloshing around randomly. The shift has both technical and fundamental legs to stand on, with healthcare earnings coming in strong and several stocks breaking into fresh uptrends.

Let's walk through six healthcare sector names that have been surging for compelling reasons and score exceptionally well on momentum rankings.

Cardinal Health Inc.: The Pharmaceutical Wholesaler Waking Up

Momentum Score: 88.62

We'll start with the heavyweights. Cardinal Health Inc. (CAH) is one of the "Big 3" pharmaceutical wholesalers alongside McKesson Corp. and Cencora Inc. With a $48 billion market cap, Cardinal has been generating more than $50 billion in sales every single quarter since the start of 2023. The business model is straightforward: sell generic and branded drugs to pharmacies and hospitals at scale.

The stock is up more than 70% year-to-date, but the momentum really kicked into high gear recently thanks to a standout quarterly report. CAH shares had been stuck in a tight range since July, trading sideways while investors waited for a catalyst. That catalyst arrived on October 30th when the Q3 earnings release sent shares up 15% in a single session.

Cardinal posted its first simultaneous top and bottom line beat since Q4 of last year, with earnings per share coming in more than 16% above what analysts expected. If you were watching the technical indicators, you might have seen this coming. The stock surged above its 50-day simple moving average in the weeks leading up to the release, a classic sign that something positive was brewing.

Guardant Health Inc.: Blood-Based Cancer Detection Takes Off

Momentum Score: 97.44

Guardant Health Inc. (GH) is another large-cap healthcare name riding a rally this month, though its specialty couldn't be more different from Cardinal's wholesale distribution. Guardant focuses on oncology diagnostics with an emphasis on blood-based cancer detection. The company's primary revenue driver is the Guardant360 system, which offers non-invasive screening tests capable of detecting more than 70 cancer-related gene mutations.

The company recently received FDA approval for its Guardant360 CDx companion diagnostic system, a breast cancer diagnostic tool that expands its market opportunity. Like Cardinal, Guardant's shares got a massive post-earnings boost from better-than-expected results. The company reported a narrower loss than analysts anticipated and $265 million in revenue, a quarterly record representing more than 38% year-over-year growth.

Here's what makes the chart interesting: the stock began trending upward several weeks before the results dropped. The support level jumped from the 200-day simple moving average to the 50-day simple moving average and held firm. A pullback to test previous support levels wouldn't be shocking from here, but the long-term uptrend looks promising for investors with patience.

Abivax SA: When Clinical Trials Go Very Right

Momentum Score: 99.88

Now let's jump into biotech territory with Abivax SA (ABVX), a French pharmaceutical developer focused on chronic inflammatory diseases. The company's flagship drug, obefazimod, is a treatment for moderate-to-severe ulcerative colitis currently working its way through clinical trials.

Abivax announced results from Phase 3 clinical trials in July, and if you're wondering how well those results were received, consider this: the stock gained nearly 600% in a single trading session. That's not a typo. When clinical trial results exceed expectations by that magnitude, the market reaction is swift and dramatic.

The upside potential in ABVX shares might not be fully priced in yet. The stock is up another 60% over the last three months following a wave of analyst price target increases, including a new high of $176 from Wolfe Research. Overall, the stock carries a consensus Buy rating from 15 analysts, with an average target price of $156 based on the three most recent upgrades. There's still room to run if the drug continues to progress smoothly.

Medpace Holdings Inc.: The Behind-the-Scenes Player

Momentum Score: 93.62

Companies like Abivax develop promising drugs, but they need companies like Medpace Holdings Inc. (MEDP) to test whether those drugs actually work. Medpace offers clinical trial services to pharmaceutical and medical device developers, essentially serving as the quality control infrastructure for the entire drug development industry.

The company's recent earnings performance has sparked a significant rally. Shares are up more than 75% year-to-date, and earnings beats have been the catalyst for two of the largest up days during this run. Medpace's Q2 2025 revenue exceeded expectations by nearly 12%, and the company followed up with another top and bottom line beat for Q3 when results landed on October 22nd.

Management reported Q3 revenue up more than 23% year-over-year and expects to quickly refill its 2026 backlog following some cancellations earlier this year. The technical picture looks solid too. The stock appears to be building upward momentum with consistent support along the 50-day simple moving average, which is exactly what momentum traders want to see.

Elanco Animal Health Inc.: Don't Forget the Furry Patients

Momentum Score: 89.21

Four-legged family members need healthcare too. Elanco Animal Health Inc. (ELAN) develops a range of food, medicines, and preventatives for both pets and farm animals. One of the company's most successful products is Simparica Trio, an oral medication for dogs that prevents ticks, fleas, roundworms, and a host of other parasites.

ELAN shares are up 76% this year, and once again, the rally is grounded in actual earnings performance rather than speculation about potential future profits. Elanco's Q3 earnings exceeded both top and bottom-line expectations, and the company raised full-year guidance with both the Pet Health and Farm Animal divisions reporting double-digit year-over-year sales growth.

Despite the positive earnings news, ELAN shares are down over the last month and have pulled back to the 50-day simple moving average. However, that moving average has been a key bounce support level throughout this rally. This could present a solid entry point for new investors, especially considering the RSI has dropped to its lowest level since August. Sometimes the best buying opportunities come during temporary weakness in otherwise strong uptrends.

GeneDx Holdings Corp.: Genome Testing Finds Its Footing

Momentum Score: 93.18

GeneDx Holdings Corp. (WGS) specializes in exome and genome testing, a still relatively speculative corner of the healthcare industry that has only recently started generating consistent profits. But here's what makes GeneDx interesting: it's a consistent winner during earnings season.

Results posted last month included a substantial guidance raise for both total revenue and adjusted gross margins. The company's market cap is now approaching $4 billion following back-to-back quarters with $100 million in sales. That's a meaningful milestone for a company that was burning cash not too long ago.

WGS shares have been volatile over the last three months, with buyers and sellers in a fairly evenly matched tug-of-war. However, the stock is bouncing off the 50-day simple moving average again, which has proven to be a reliable support level. For investors comfortable with a bit more volatility, this could represent another buying opportunity in a name with strong growth fundamentals.

The Bigger Picture

What ties these six companies together isn't just strong momentum scores. It's the combination of solid fundamental performance meeting technical breakouts at exactly the right moment. When earnings consistently beat expectations and stocks find reliable support at key moving averages, that's when momentum strategies tend to work best.

The rotation out of tech and into healthcare isn't happening in a vacuum. These healthcare names are delivering the goods with real revenue growth, margin expansion, and in many cases, better-than-expected profitability. That's the kind of foundation that can sustain a rally beyond just a few weeks of enthusiasm.

Whether this rotation has staying power depends on whether these companies can continue executing on their earnings. But for now, the combination of technical and fundamental tailwinds is creating genuine opportunities in a sector that spent years playing second fiddle to tech darlings.