The next great trade may be taking shape…

And it’s brewing in one of the market’s most ignored corners.

I’m talking about biotech stocks.

A couple of weeks ago, I explained why I was bullish on healthcare. I’m doubling down on that call.

Specifically, I’m laser-focused on the opportunities brewing in biotech. In fact, the industry today reminds me of semiconductor stocks in 2024.

Back then, artificial intelligence (AI) was moving from hype to a real spending boom. Tech giants were pouring billions into data centers. That meant huge demand for the chips needed to power them. Investors saw that demand show up in orders, sales, and earnings.

Naturally, semiconductor stocks took off. The iShares Semiconductor ETF (SOXX) has surged more than 143% since the start of 2024.

Biotech could be approaching its own turning point.

Take a look at this chart. The State Street SPDR S&P Biotech ETF (XBI) is nearing a breakout from a massive base.

The iShares Biotechnology ETF (IBB) looks even stronger.

Within the space, we’re seeing industry leaders emerge. Moderna (MRNA), for example, is the strongest stock in the entire market, up 364% in the past six months.

Biotech won’t move exactly like semiconductors. But the setup has a familiar feel…

Biotech is a transformative industry. It’s full of fresh catalysts. And it’s a market few investors are paying attention to. 

Either XBI or IBB are a good way to play this trend.

Justin Spittler Director of Trading, RiskHedge