Healthcare offers strong innovation and defensive growth beyond tech, boosted by AI and weight loss drugs.

While tech stocks have traditionally been the go-to for investing in innovation, the healthcare sector is emerging as a compelling alternative. Healthcare companies are leveraging artificial intelligence for diagnostics, patient care, and drug discovery, accelerating growth opportunities. Additionally, the rising popularity of weight loss drugs adds to the sector's potential. Healthcare stocks also provide defensive value due to consistent demand regardless of economic conditions. The State Street Health Care Select Sector SPDR ETF (XLV) offers a low-cost way to access this sector, which has shown strong performance with a 14.66% NAV increase over the past year as of May 2026.