Forget Fauci—Pharma Is Catching Fire
Inflection point
Healthcare has become one of the market's most hated sectors after suffering one of its worst relative drawdowns in decades. Much of the weakness appears to have little to do with fundamentals and more to do with positioning, as investors have increasingly funded crowded AI longs by shorting healthcare. With valuations still depressed and earnings growth expected to reaccelerate into 2027, the setup is starting to look increasingly attractive. As JPM puts it: "Following one of the deepest periods of underperformance in decades, we have been turning more constructive on the sector."