Bellevue AI Health

Volatility in global equity markets declined in April following the agreed ceasefire. At the same time, better-than-expected consumer confidence, a significantly more robust US labor market, and lower-than-expected core inflation supported the broad recovery in equity markets.

Accordingly, the MSCI World rose 9.6%, the S&P 500 gained 10.5%, and the Nasdaq 100 advanced 15.7%. In contrast, the broad healthcare sector declined by 0.2%, with medtech, pharmaceuticals, and biotechnology stocks acting as a drag. Healthcare services providers were the only segment to deliver strong performance, rising 14.2%. The Bellevue AI Health Fund also recorded a slightly negative performance of -0.4%, but broadly kept pace with its benchmark.

Biopharma (58.6% weighting at the end of the month) detracted -1.1% from absolute performance and -0.2% from relative performance. Novo Nordisk (+19.8%), Roche (+3.6%), and Eli Lilly (+1.6%) made positive contributions, while Merck & Co (-9.2%), Gilead (-6.1%), and Johnson & Johnson (-6.0%) weighed on performance. Novo Nordisk and Eli Lilly were in focus due to early competition between Novo’s Wegovy and Lilly’s Foundayo in the treatment of diabetes and obesity. According to IQVIA prescription data, the market launch of Foundayo has so far been weaker than that of Wegovy. Nevertheless, Eli Lilly closed higher, supported by better-than-expected quarterly results. Merck came under pressure after the LITESPARK-012 study of Welireg in first-line renal cell carcinoma failed to meet its two primary endpoints of progression-free survival and overall survival. This reduced expectations for additional peak sales in this indication, although opportunities in second-line and adjuvant settings remain intact.

The medtech segment (25.6% weighting) detracted -0.9% from absolute performance, while its relative contribution was neutral. Hoya (+11.3%), Kestra Medical (+4.0%), and Evotec (+24.1%) contributed positively, while GE Healthcare (-14.5%), Abbott (-11.0%), and Boston Scientific (-8.2%) detracted. Hoya continued to benefit from investment plans by technology companies in data centers and storage capacity. In addition, quarterly results in its semiconductor and hard disk drive segments were strong. GE Healthcare declined as solid revenue growth was offset by increased cost pressure.

Healthcare services providers (11.2% weighting) contributed +1.7% to absolute performance, with a neutral impact on relative performance. UnitedHealth (+36.9%), Elevance (+28.6%), and Omada Health (+16.0%) were the main contributors, while HCA Healthcare (-8.2%) and McKesson (-5.8%) detracted. The two health insurers surprised positively with higher earnings per share, supported by lower medical costs, and raised their guidance for 2026. In contrast, Q1 volumes at hospital operator HCA were negatively affected by one-off factors such as a mild flu season and winter storms.

The technology segment (3.4% weighting), which includes companies from the healthcare and information technology sectors, contributed +0.2% to both absolute and relative performance. Qualcomm (+39.4%), Nvidia (+14.4%), and Microsoft (+10.2%) made positive contributions, while Waystar (-11.3%) and Veeva Systems (-11.2%) detracted. Qualcomm gained after announcing a program for custom-designed chips to be delivered to a major hyperscaler by the end of 2026, fueling expectations of stronger positioning in data center and AI infrastructure markets. Veeva came under pressure due to expected weaker momentum in its biopharma R&D cloud software backlog; however, new clinical cloud applications provide a more constructive outlook.

All performance data in USD / B shares.

The rapid development of generative artificial intelligence (GenAI) is ushering in an unprecedented technological transformation that ranks alongside milestones such as the internet, cloud computing, and the smartphone. This is creating significant opportunities for companies and investors, particularly in the healthcare sector. Various studies conclude that healthcare is one of the sectors most likely to benefit from the application of GenAI. This is primarily due to its high potential for efficiency gains, the large volume of available data, and the substantial financial resources within healthcare systems.

We are already seeing how drugs are being developed faster and with higher probabilities of success, how new diagnostic and treatment approaches are leading to improved clinical outcomes, and how GenAI is helping healthcare professionals make more informed and better decisions. We focus on healthcare companies that have made GenAI a core element of their business strategy and are investing significant resources in this technology. These companies can achieve a sustainable competitive advantage and drive above-average value creation. Technology risk is also more manageable, given that healthcare is a highly regulated market.