Nobody Wants To Touch Healthcare Stocks Now – That Might Be A Big Mistake

Healthcare stocks are trailing the broader market by margins not seen since 2008, as tumbling pharma giants and a stampede toward tech and AI names have left the sector deeply out of interest.

The Healthcare Select Sector SPDR Fund (NYSE:XLV) now trades at just 0.2234 shares of the S&P 500 ETF Trust (NYSE:SPY), its weakest relative value in more than a decade. In 2015, that ratio was 0.35, making today’s level a 40% drop in comparative value.

In May 2025, healthcare lagged the S&P 500 by 11.2%, the worst single-month relative performance since records began. Versus the red-hot tech sector, the gap is even more extreme, at levels last seen in February 2000.

Have we been here before? Yes, and history suggests this kind of extreme undervaluation often triggers powerful reversals.

The Last Time Healthcare Was This Unloved Was In 2008…