Earn Your Leisure Podcast – Episode Summary

Episode Title: Healthcare Stocks Outlook 2025: Should You Invest?
Air Date: October 6, 2025
Hosts: Rashad Bilal and Troy Millings
Notable Guests/Experts: Healthcare Market Commentator, Healthcare Sector Expert, Financial Analyst

Overview

This episode dives into the 2025 outlook for healthcare stocks, examining recent volatility, the impact of political and policy moves (e.g., tariffs, lawsuits), and how technological innovation—especially artificial intelligence (AI)—is poised to reshape the sector. The hosts and expert guests discuss which companies and trends to watch, highlight common investor mistakes, and provide practical advice on structuring a healthcare portfolio for the coming year.

Key Discussion Points & Insights

1. Recent Performance of Healthcare Stocks

• State of the Market: The healthcare sector has experienced a “rocky road,” hindered by overseas pharmaceutical tariffs, high-profile lawsuits (notably concerning Ozempic), and shifting investor expectations ([01:59]).
• Investor Mistake: Attempting to compare or match healthcare returns to those from the tech sector has been a recurring error. The price bubble, notably in stocks like Eli Lilly, eventually led to corrections.
  • Quote:
    “One of the biggest mistakes was that sector trying to price in healthcare returns to match tech returns.” – Financial Analyst [02:45]

2. Tariffs and Policy Changes

• Tariffs on Overseas Pharmaceuticals: The Trump-era tariffs (up to 100% if manufacturing is not in the US) continue to affect select companies, pushing an incentive for U.S.-based production ([05:21]).
  • Quote:
    “The tariffs only go into effect at 100% if you're not building a plant inside of the United States...you’re trying to incentivize people to build infrastructure here.” – Healthcare Sector Expert [05:21]

3. Impact of Technology and AI

• AI’s Role in Healthcare: Both hosts and experts agree that every company will need an AI component, mirroring a decade-old shift where “every company became a tech company.” This opens the door for swift biotech and operational innovations ([05:00]).
  • Quote:
    “Last week he [Vlad Tenev] said every company is going to be an AI company because it has to have an AI component, and healthcare is not excluded from that.” – Healthcare Sector Expert [05:00]

4. How to Invest in the Sector

• Domestic Focus: Experts advise focusing on U.S. healthcare companies that benefit from current policy priorities (XLV ETF top holdings: Eli Lilly, Johnson & Johnson, ABBV, UnitedHealth, Abbott, Merck, Stryker, etc.) ([05:21]-[06:34]).

  • Advice:
    “Go look up these healthcare ETFs and see what allocations...keep an eye on the top five in XLV and put [them] on your watch list.” – Healthcare Sector Expert [06:21]

• Select Stocks to Watch:

  • *“The only three I like in the space: Eli Lilly, ABBV, and Stryker. You're not [in] United Healthcare until I get a new CEO and this trial is over with.” – Financial Analyst [06:52]
  • CVS is also mentioned as a solid performer, but the focus remains on companies with strong portfolios and leadership ([07:45]).
  • Leadership and company fundamentals (policy support, innovation) are key filters ([08:07]-[08:28]).

• Realistic Return Expectations:

  • Seek stability, not explosive growth:
    “Will next year be a little bit better? Yes, but I don't think you should expect 35 to 45% return in healthcare at all.” – Financial Analyst [04:10]

5. Broader Investment Considerations

• Healthcare: A Portfolio Staple?
  • Given its massive share of U.S. government spending, healthcare is recommended as a core portfolio sector, but with selectivity and tempered expectations ([07:54]-[08:07]).
    • Quote:
      “We spend all this money on healthcare, but we are one of the sicker major countries in the world.” – Financial Analyst [08:07]

Notable Quotes & Memorable Moments

| Timestamp | Speaker | Quote | |-----------|------------------------|---------------------------------------------------------------------------------------------------------------| | 02:45 | Financial Analyst | “One of the biggest mistakes was that sector trying to price in healthcare returns to match tech returns.” | | 04:10 | Financial Analyst | “Will next year be a little bit better? Yes, but I don't think you should expect 35 to 45% return in healthcare at all.” | | 05:00 | Healthcare Sector Expert| “Every company is going to be an AI company because it has to have an AI component, and healthcare is not excluded from that.”| | 05:21 | Healthcare Sector Expert| “The tariffs only go into effect at 100% if you're not building a plant inside of the United States.” | | 06:21 | Healthcare Sector Expert| “Go look up these healthcare ETFs and see what allocations...keep an eye on the top five in XLV and put [them] on your watch list.” | | 06:52 | Financial Analyst | “The only three I like in the space: Eli Lilly, ABBV, and Stryker. You're not [in] United Healthcare until I get a new CEO and this trial is over with.” | | 08:07 | Financial Analyst | “We spend all this money on healthcare, but we are one of the sicker major countries in the world.” |

Timestamps for Important Segments

• [01:59] — Overview of healthcare stocks' recent struggles (lawsuits, tariffs, “bumpy road”)
• [02:45] — Mispricing healthcare vs. tech sector; Eli Lilly’s rise and correction
• [04:10] — Realistic returns for 2025 and sector expectations
• [05:00] — AI’s coming “disruption” of health sector
• [05:21] — Tariff policy and its impact (U.S.-centric production)
• [06:21] — How to select stocks; review of leading U.S. healthcare companies and ETFs
• [06:52] — Top three healthcare stocks to watch: Eli Lilly, ABBV, Stryker
• [07:45] — Shout-out to CVS as a consistent, reliable performer
• [08:07] — Conversation about healthcare as a mandatory portfolio allocation, but with realism

Conclusion

The panel urges investors to approach healthcare stocks differently from technology investments, emphasizing the sector’s steadiness and policy rooting over spectacular returns. Focus should remain on U.S. giants with good leadership and government backing—namely Eli Lilly, ABBV, and Stryker, with ETFs as a practical entry point. Technological (especially AI-driven) innovation and shifting policy (such as tariffs) will be key drivers in the year ahead, but expectations for outsized returns should be tempered.

Final advice:
“Invest in the best, go with companies with strong policy and leadership, and keep your return expectations grounded for healthcare in 2025.”