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2 Healthcare Technology Stocks for a Digital Health Boom

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Key Takeaways

  • Globus Medical projects 2026 EPS growth of 25.4%, driven by surgical technologies.
  • STERIS projects 2026 EPS growth of 9.8%, supported by sterilization solutions.
  • Both stocks trade below the industry forward P/E of 26.00.

Healthcare technology is emerging as an attractive investment theme in the current market environment, supported by rising demand for efficient medical services, digital transformation and advances in artificial intelligence (AI). With investors navigating elevated interest rates, geopolitical uncertainty and questions about the sustainability of AI-driven valuations, healthcare technology offers exposure to innovation tied to essential services.

Hospitals, insurers and healthcare providers are increasingly adopting digital platforms, automation and data analytics to improve productivity, streamline administrative processes and manage costs. These structural needs could support demand even if economic growth moderates. Globus Medical, Inc. (GMED - Free Report) and STERIS plc (STE - Free Report) are two healthcare technology stocks that stand out in this environment.

AI and Digital Transformation Drive Industry Growth

A key growth driver is the adoption of AI-powered diagnostics, electronic health records, cloud-based platforms, robotic surgery and automated revenue-cycle management. These technologies can help healthcare organizations identify diseases earlier, reduce administrative workloads and improve resource utilization. Forrester projects that U.S. healthcare providers' technology budgets will reach $69 billion by the end of 2026, an increase of 7.6% year over year. A September survey by Bain & Company and KLAS Research found that 95% of surveyed healthcare providers and payers ranked software and digital technology among their top five strategic priorities.

Recurring Revenue and Essential Services Support Resilience

Healthcare technology also offers an opportunity to diversify portfolios amid uncertainty surrounding expensive AI stocks and interest rates. Unlike consumer-facing technology businesses, many healthcare technology providers address essential operational requirements, including clinical data management, cybersecurity, billing and regulatory compliance. Recurring software revenue and deeply integrated systems can support customer retention, although adoption costs and implementation challenges remain important considerations. Growing demand for connected care, remote monitoring and data analytics further expands the industry's potential revenue opportunities.

Our Choices

The stocks below flaunt a Zacks Rank #1 (Strong Buy) or Rank #2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here, V stands for Value, G for Growth and M for Momentum. The score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.

Globus Medical develops musculoskeletal implantable devices, surgical instruments and robotic-assisted navigation systems. Its technologies support spine surgery and other orthopedic procedures, helping surgeons improve precision and surgical outcomes.

The firm currently carries a Zacks Rank #2 and VGM Score of A. Its forward P/E of 16.22 is significantly below the industry benchmark of 26.00. GMED has a projected 2026 EPS growth of 25.4% and displayed a 49.4% earnings surprise for the latest quarter.

STERIS develops infection-prevention, sterilization and decontamination equipment, products and services for hospitals, medical-device manufacturers and life-sciences companies. Its offerings include sterilizers, endoscope-reprocessing systems, surgical equipment, consumables and outsourced sterilization services.

The company currently carries a Zacks Rank #2 and VGM Score of B. Its forward P/E of 20.46 is below the industry benchmark of 26.00. STE has a projected 2026 EPS growth of 9.8% and delivered a 3.8% earnings surprise for the last reported quarter.

Bottom Line

Investors should nevertheless distinguish sustainable growth opportunities from speculative ventures. Competition, data privacy requirements, regulatory scrutiny and uncertainty over whether AI investments generate measurable returns could weigh on profitability. Healthcare technology should therefore be considered a promising long-term investment theme rather than an automatic buy. Selective exposure to financially sound companies with demonstrable commercial traction may offer a compelling balance of structural growth and resilience in the current market environment.

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