Biotech and healthcare stocks are attracting renewed investor attention as companies combine strong base businesses with promising new therapies, diagnostics and precision-medicine platforms. While the sector carries clinical, regulatory and valuation risks, several companies are showing impressive revenue growth and expanding their addressable markets.
Here are five biotech and healthcare stocks worth watching in 2026.
1. Gilead Sciences (NASDAQ: GILD)
Gilead Sciences stands out because it combines a relatively established revenue base with opportunities for future growth. The company delivered a strong second quarter, with base-business revenue increasing 10% year over year, supported by its HIV portfolio, Trodelvy and Livdelzi.
Its HIV franchise remains particularly important. HIV sales increased 12%, helped by continued treatment demand and rapid expansion of its PrEP business. This provides Gilead with a relatively stable source of recurring revenue while the company continues developing its broader oncology and infectious-disease pipeline.
Gilead is also exploring the use of AI-powered tissue analysis in oncology, potentially improving how cancer patients are diagnosed and treated.
The main risks include pricing pressure, competition and ongoing debates around access to HIV medicines. Nevertheless, Gilead’s combination of a strong HIV franchise, established cash flows and pipeline opportunities makes it an attractive healthcare stock to watch.
Why investors may like it: Strong base revenue, HIV leadership, PrEP growth and oncology opportunities.
2. Vertex Pharmaceuticals (NASDAQ: VRTX)
Vertex Pharmaceuticals has built one of the strongest positions in the biotechnology industry through its cystic fibrosis medicines. The company has historically benefited from having a dominant position in CF treatment, although competitors are working to develop alternative therapies.
The bigger opportunity for Vertex could be diversification beyond cystic fibrosis.
One of the company’s key pipeline candidates is povetacicept, an investigational treatment for IgA nephropathy. The therapy completed a Phase 3 study and could potentially receive U.S. regulatory approval later in 2026.
If approved and successfully expanded into additional indications, povetacicept could become a significant contributor to Vertex’s future revenue. Analysts have estimated potential peak annual sales of more than $1 billion.
That gives investors an important reason to look beyond Vertex’s current CF business.
Why investors may like it: Dominant CF franchise, strong cash generation and potential for a major new revenue stream.
3. Veracyte (NASDAQ: VCYT)
Veracyte offers a different way to invest in biotechnology: instead of developing traditional drugs, the company focuses on genomic diagnostics that help doctors diagnose and treat cancer and other diseases.
The company’s Q2 2026 performance showed strong momentum. Revenue increased 15% year over year, while testing revenue grew 19%. Decipher testing increased 20% and Afirma grew 18%.
At the same time, gross margin improved to 72% from 69%, while operating cash flow reached approximately $45.8 million.
Veracyte is also expanding its addressable market with products including Prosigna LDT and TrueMRD.
The attraction is that genomic testing can become increasingly important as medicine moves toward more personalized treatment decisions. Successful adoption of additional tests could provide Veracyte with multiple avenues for long-term growth.
Why investors may like it: Strong testing growth, improving margins, recurring diagnostic demand and expanding product portfolio.
4. Krystal Biotech (NASDAQ: KRYS)
Krystal Biotech is one of the more speculative names on this list, but its potential upside comes from its genetic medicine platform.
The company has developed a gene-therapy platform designed to deliver genetic material directly to target tissues. Continued adoption of its therapies could support substantial revenue growth if the company successfully expands its commercial footprint.
The key question for investors is whether the company’s current valuation adequately reflects the sustainability of its growth.
That makes Krystal a higher-risk proposition than established pharmaceutical companies such as Gilead and Vertex.
Investors should therefore focus closely on product adoption, revenue growth, pipeline development and the company’s ability to expand beyond its initial commercial opportunities.
Why investors may like it: Gene-therapy platform, commercial adoption potential and significant long-term growth opportunity.
5. CareDx (NASDAQ: CDNA) — Rapid Growth in Transplant Diagnostics
CareDx is a precision-medicine diagnostics company focused on transplant surveillance, specialty oncology and cell therapy.
Its latest results demonstrate why the stock is attracting attention. In Q2 2026, revenue increased an impressive 52% year over year, while testing-services revenue climbed 61%.
Management also raised its full-year revenue and adjusted EBITDA guidance, providing investors with additional confidence in the company’s growth trajectory.
CareDx benefits from the increasing importance of precision diagnostics in transplant medicine. Monitoring patients after transplantation can help physicians identify potential problems earlier and make better treatment decisions.
The combination of rapidly increasing testing volumes and improved financial performance makes CareDx one of the more interesting small-cap healthcare growth stories.
Why investors may like it: 52% revenue growth, rapidly expanding testing business, improved profitability and raised guidance.
