State Street SPDR S&P Biotech ETF

XBI

Market cap $8.75B

After a 50%+ run from lows last April through highs in mid-January, the Biotech group has been trending sideways over the last few months. Biotech hasn't garnered much attention lately, with all the coverage of the Iran War and the AI Doom trade that's been taking down software stocks even as AI infrastructure stocks continue to surge.

Biotech has long been one of the strongest sector stories of the past year, and investors who got there early have been rewarded.

The biotech industry has been a robust roller-coaster over the last half decade.

The biotech sector, tracked by the iShares Biotechnology ETF (IBB), remained flat in early 2026, despite broader market declines and volatility. Recent high buyout premium M&A activity, including Biogen's $5.6B Apellis acquisition, fueled sector outperformance and an uptick in investor enthusiasm.

The bulk of coverage towards the top gaining stock sectors over the past year has focused understandably on technology, which has made huge strides, with semiconductors exceeding +60%.

The State Street SPDR S&P Biotech ETF (XBI) was launched on 01/31/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Health Care ETFs category of the market.

IBB and other biotech ETFs are gaining traction as AI reshapes drug discovery, genomics, and clinical trials, giving investors diversified exposure to biotech innovation.

I reiterate a Hold rating on State Street SPDR S&P Biotech ETF due to fair valuation and mixed technicals. XBI's recent outperformance has faded, with higher interest rates and a less risk-on market weighing on absolute and relative strength. At 19.3x P/E and just 3.2% long-term EPS growth, XBI lacks compelling value or growth catalysts near term.

The State Street SPDR S&P Biotech ETF (XBI) was launched on January 31, 2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Healthcare - Biotech segment of the equity market.

Over the past three years, healthcare has been among the worst-performing sectors. 2026's market rotation away from tech is bringing new life to more defensive areas of the market.