Healthcare Climbs as Tech Stumbles in 2025 Shift

By Mark Sheridan

Mar 26, 2025

3 min read

Not all corners of the market are moving in the same direction this year. 2025 has already delivered a few surprises for sector-focused investors.

Healthcare Stocks

Year-to-date, the S&P 500 Information Technology Index has dropped -7.56%, signaling a pause in the multi-year rally that carried names like Broadcom Inc (NASDAQ: AVGO) and ServiceNow Inc (NYSE: NOW) to new highs. These long-time favorites delivered consistent gains over the past five years, but 2025 has brought a shift. Meanwhile, the S&P 500 Health Care Index has climbed 6.04%, supported by renewed interest in biotech and other speculative segments. Investors appear to be rotating into sectors with perceived upside from innovation and pipeline potential, even as traditional tech leaders face profit-taking and valuation concerns. One early standout in this rotation is Medicus Pharma (NASDAQ: MDCX), which has gained 32.1% year-to-date. This momentum reflects a growing appetite for small-cap names with promising clinical assets and strong catalysts in the quarters ahead.

This divergence between tech and healthcare highlights a broader market reassessment of risk and growth. Investors who once chased margin expansion and cloud-driven revenue in tech are now eyeing the asymmetric upside in clinical-stage biotech and emerging healthcare platforms. While tech giants grapple with elevated expectations and compressed multiples, health care offers a different kind of narrative—one centered on breakthrough therapies, regulatory milestones, and long-term demographic demand. The capital rotation suggests that risk-on sentiment hasn't disappeared; it's just finding new avenues where innovation feels underpriced and progress is more tangible.

Medicus Pharma Ltd. (NASDAQ: MDCX) is one little-known micro-cap making strides with its innovative SkinJect microneedle patch for basal cell carcinoma (BCC)1. Currently in Phase 2 trials and already showing promising interim results2, the SkinJect patch offers patients a painless, cost-effective alternative to invasive Mohs surgery. The treatment targets a lucrative $7B market and is on track to potentially secure FDA Fast-Track designation within months. Medicus aims to grow its pipeline through acquisitions and partnerships to deliver innovative products with strong commercial potential. The company has no long-term debt and a deep commitment to treat shareholders equally.

Broadcom Inc’s (NASDAQ: AVGO) nearly 19% stock decline year-to-date reflects a mix of industry pressure and company-specific concerns. The broader tech sector has come under strain as recession fears and shifting U.S. policy drive a pullback in high-growth names. Investors have also grown cautious about Broadcom’s AI position amid rising competition from low-cost model developers like DeepSeek, which could reduce demand for its high-end chips. Manufacturing concerns have surfaced as Broadcom reportedly tests Intel’s production, raising doubts given Intel’s output issues. These headwinds have overshadowed strong Q1 results3, with 25% revenue growth and solid AI-related gains. In March, Broadcom disclosed four major VMware security flaws. Three were actively exploited zero-days; another allowed low-level users to gain elevated access on virtual machines4. These incidents have sparked concerns about ongoing cybersecurity risks tied to VMware, a key part of Broadcom’s enterprise software portfolio.

ServiceNow Inc (NYSE: NOW) has faced several headwinds this year that have put downward pressure on its stock. The company reported softer-than-expected subscription revenue growth for 20255, which was influenced by negative currency exchange rates and a slower revenue recognition tied to its shift toward a consumption-based pricing model for its new AI products. In addition, its federal business remains concentrated towards the end of the year, which affects the timing of revenue recognition and contributes to the guidance coming in below analyst consensus. These factors have dampened investor sentiment, with the stock declining nearly 19% year-to-date despite underlying business strengths.

The contrasting trajectories between tech and health care underscore a broader market rotation, with investors seeking growth in areas less exposed to cyclical headwinds and more aligned with innovation-driven upside. While once-reliable names like Broadcom and ServiceNow contend with shifting business dynamics and valuation resets, emerging players in health care are capturing attention with disruptive platforms and near-term catalysts. As capital flows follow conviction, the spotlight appears to be shifting toward companies offering clinical innovation, operational discipline, and strategic agility in a changing market landscape.

The biotech industry thrives on innovation, and some companies stand out for their unique approach to treating high-demand conditions. Interested in emerging biotech developments?

Related Articles:

Explore more on these topics:

Pharmaceuticals Biotechnology Healthcare

Important Notice And Disclaimer

PAID ADVERTISEMENT

This communication is a paid advertisement. ValueTheMarkets is a trading name of Digitonic Ltd, and its owners, directors, officers, employees, affiliates, agents and assigns (collectively the “Publisher”) is often paid by one or more of the profiled companies or a third party to disseminate these types of communications. In this case, the Publisher has been compensated by Medicus Pharma to conduct investor awareness advertising and marketing and has paid the Publisher the equivalent of one hundred and seventy five thousand US dollars starting 3rd March 2025 for a period of 4 weeks until 28th March 2025 to produce and disseminate this and other similar articles and certain related banner advertisements. This compensation should be viewed as a major conflict with the Publisher’s ability to provide unbiased information or opinion.

CHANGES IN SHARE TRADING AND PRICE

Readers should beware that third parties, profiled companies, and/or their affiliates may liquidate shares of the profiled companies at any time, including at or near the time you receive this communication, which has the potential to adversely affect share prices. Frequently companies profiled in our articles experience a large increase in share trading volume and share price during the course of investor awareness marketing, which often ends as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in share trading volume and share price may likely occur.

NO OFFER TO SELL OR BUY SECURITIES

This communication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security.

INFORMATION

Neither this communication nor the Publisher purport to provide a complete analysis of any company or its financial position.

This communication is based on information generally available to the public and on an interview conducted with the company’s CEO, and does not contain any material, non-public information. The information on which it is based is believed to be reliable. Nevertheless, the Publisher does not guarantee the accuracy or completeness of the information. Further, the information in this communication is not updated after publication and may become inaccurate or outdated. No reliance should be placed on the price or statistics information and no responsibility or liability is accepted for any error or inaccuracy. Any statements made should not be taken as an endorsement of analyst views.

NO FINANCIAL ADVICE

The Publisher is not, and does not purport to be, a broker-dealer or registered investment adviser or a financial adviser. The Publisher has no access to non-public information about publicly traded companies. The information provided is general and impersonal, and is not tailored to any particular individual’s financial situation or investment objective(s) and this communication is not, and should not be construed to be, personalized investment advice directed to or appropriate for any particular investor or a personal recommendation to deal or invest in any particular company or product. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Further, readers are advised to read and carefully consider the Risk Factors identified and discussed in the advertised company’s SEC, SEDAR+ and/or other government filings. Investing in securities, particularly microcap securities, is speculative and carries a high degree of risk. Past performance does not guarantee future results.

FORWARD LOOKING STATEMENTS

This communication contains forward-looking statements, including statements regarding expected continual growth of the featured companies and/or industry. Statements in this communication that look forward in time, which include everything other than historical information, are based on assumptions and estimates by our content providers and involve risks and uncertainties that may affect the profiled company’s actual results of operations. These statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results and performance to differ materially from any future results or performance expressed or implied in the forward-looking statements. These risks, uncertainties and other factors include, among others: the success of the profiled company’s operations; the size and growth of the market for the company’s products and services; the company’s ability to fund its capital requirements in the near term and long term; pricing pressures; changes in business strategy, practices or customer relationships; general worldwide economic and business conditions; currency exchange and interest rate fluctuations; government, statutory, regulatory or administrative initiatives affecting the company’s business.

INDEMNIFICATION/RELEASE OF LIABILITY

By reading this communication, you acknowledge that you have read and understand this disclaimer in full, and agree and accept that the Publisher provides no warranty in respect of the communication or the profiled company and accepts no liability whatsoever. You acknowledge and accept this disclaimer and that, to the greatest extent permitted under applicable law, you release and hold harmless the Publisher from any and all liability, damages, injury and adverse consequences arising from your use of this communication. You further agree that you are solely responsible for any financial outcome related to or arising from your investment decisions.

TERMS OF USE AND DISCLAIMER

By reading this communication you agree that you have reviewed and fully agree to the Terms of Use found here https://www.valuethemarkets.com/terms-conditions/ and acknowledge that you have reviewed the Disclaimer found here https://www.valuethemarkets.com/disclaimer/. If you do not agree to the Terms of Use, please contact valuethemarkets.com to discontinue receiving future communications.

INTELLECTUAL PROPERTY

All trademarks used in this communication are the property of their respective trademark holders. Other than valuethemarkets.com, the Publisher is not affiliated, connected, or associated with, and the communication is not sponsored, approved, or originated by, the trademark holders unless otherwise stated. No claim is made by the Publisher to any rights in any third-party trademarks other than valuethemarkets.com.

AUTHORS: VALUETHEMARKETS

valuethemarkets.com and Digitonic Ltd and our affiliates are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above. This article does not provide any financial advice and is not a recommendation to deal in any securities or product. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

ValueTheMarkets do not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above piece. ValueTheMarkets have been paid to produce this piece by the company or companies mentioned above. Digitonic Ltd, the owner of valuethemarkets.com, has been paid for the production of this piece by the company or companies mentioned above.