UBS published a note this week that, between the lines, conveys a sense of mild bewilderment. There is one sector where the figures look solid, yet investors treat it as outdated and irrelevant.
The focus is on the US medical supplies and devices sector. Curiously, Wall Street investors term it as the eternal “buy later” candidate.
According to UBS, the medtech sector delivered steady performance across the board in Q2 2025. Growth, revenue, margins — everything is tip-top. However, the market seems to focus on other stories. "Healthcare remains an unloved sector, and medtech is particularly underperforming," the analysts wrote.
In market terms, it means: everything is fine, but no one is buying. Healthcare’s share of the S&P index has dropped to multi-year lows. Broad-based investors, the kind who were trading oil and Tesla just yesterday, are locking in profits and moving on. Some are shifting to pharma, others to tech.
UBS openly admits it can’t say for sure what might trigger a change in sentiment. Still, the bank remains optimistic, viewing the rotation out of medtech as a buying opportunity, stating that “the group’s fundamentals remain healthy.”
Looking ahead to Q3, UBS expects to see growth in procedure volumes and positive impacts from innovation, despite ongoing challenges such as tariff uncertainty and the usual issues around Medicaid.
Market sentiment has notably soured since Q2. Even sector leaders like Boston Scientific (BSX) and Intuitive Surgical (ISRG) have come under pressure.
UBS points to “excessive concerns over the sustainability of growth” and reminds investors that the outlook for 2026 appears far more stable. In other words, there is no need to panic — the long-term picture still looks viable.
All in all, MedTech remains that rare “healthy” sector that investors continue to avoid simply out of habit.
