Jared Holz, healthcare sector specialist at Mizuho, told CNBC that healthcare stocks face an uncertain outlook due to likely gridlock in Congress following Democrats taking control. "The next couple of years I really can't see too much happening," Holz said on Wednesday's "Fast Money."
Holz recommended investors selectively pick healthcare names rather than buying broadly. He backed away from pharma stocks, which are trading more expensive than tech for the first time in 20 years, and said he would focus on medtech instead. He noted that medical device stocks trading at or near multi-year lows could outperform if recent regulations are overturned, though he expressed skepticism this would happen in the near term.
The State Street Health Care Select ETF (XLV) jumped 3% the day after Election Day but ended virtually flat this week. The fund is up around 32% since President Trump took office in January 2025, beating the S&P 500 by almost 9 percentage points.
Holz said healthcare's performance could improve if a Democrat wins the White House in 2028 and rolls back Trump administration strategies, contingent on Democrats retaining the Senate and House.