Traditionally speaking, folks that have looked to tap into innovation in the AI space have done so through tech exposure, particularly with mega-cap names. This is not a surprise, considering the interplay between these companies and AI innovation. However, healthcare also has many opportunities for innovation.
Key Takeaways:
- Tech has had a longstanding role as a means to invest in innovation, but healthcare stocks are also an attractive means of doing so.
- These stocks can tap into growth from both AI and weight loss drugs, and also provide defensive value.
- State Street provides low-cost exposure to the healthcare sector through the State Street Health Care Select Sector SPDR ETF (XLV).
However, tech stocks are certainly not the only way for folks to gain access to the growing AI trend. For instance, the healthcare sector offers a particularly compelling route to access growth from artificial intelligence.
The healthcare industry has been able to implement artificial intelligence into its operations in a multitude of ways. Not only does AI help with administrative tasks, but it assists with diagnostics and imaging, virtual nursing, patient monitoring, and more.
AI also plays a crucial role in streamlining the drug discovery process. A high-quality AI model can help run different molecular combinations to expedite how long it takes to locate a viable drug candidate.
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Growth and innovation within the sector is not limited to AI adoption, either. Weight loss medication is becoming increasingly popular, and a recent Gallup poll notes that 11% of U.S. adults are reporting using GLP-1 medicine for weight loss, up 8% from 2024’s numbers.
Best of all, healthcare exposure works as more than a growth play. Healthcare stocks are often relied upon due to their defensive value amid economic downturns. This is due to their inelastic demand — regardless of how the economy is doing, people still need these services to support their well-being.
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With Healthcare In the Spotlight, Consider XLV
The State Street Health Care Select Sector SPDR ETF (XLV) can offer low-cost exposure to a variety of different healthcare companies. This fund focuses on investing in healthcare stocks within the S&P 500. Considering how many attractive healthcare companies sit inside the S&P 500, this could be a good opportunity to capitalize on the sector.
Over the long term, XLV’s direct approach to healthcare stocks has given its investors strong long-term performance. As of May 31, 2026, the fund’s NAV has risen 14.66% over the past twelve months.
Originally posted on ETF Trends
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