Pfizer's (PFE 1.65%) shares have been southbound for the last three years. And unfortunately for the company, it doesn't look like things will improve significantly in 2026. The pharmaceutical giant's recent guidance for the fiscal period that has just started doesn't look promising, and it is still facing significant patent cliffs over the next two years, including for Eliquis, an anticoagulant that is one of its best-selling products. What's worse, Pfizer has yet to produce results from clinical trials for candidates that could replace Eliquis as well as its dwindling COVID-19 franchise.
While I believe Pfizer will rebound eventually, it will take some time to do so, and it may not occur in 2026. In the meantime, other healthcare leaders could perform significantly better this year and surpass Pfizer's market value, including Vertex Pharmaceuticals (VRTX 2.90%) and Medtronic (MDT 1.79%). Here's the rundown.
Image source: Getty Images.
1. Vertex Pharmaceuticals
Vertex Pharmaceuticals experienced significant volatility in 2025 as it encountered several roadblocks. Financial results weren't as strong as expected in some quarters, and the company abandoned the development of a medicine for type 1 diabetes (T1D) while encountering clinical roadblocks with other candidates.
However, 2026 promises to be a much better year for the biotech. Vertex's results should improve. The company remains the only one in the world that makes medicines for the underlying causes of cystic fibrosis (CF), a rare lung disease. There are still plenty of patients to treat for this condition. Also, Vertex should see newer approvals, particularly Journavx, a medicine for acute pain, make progress this year. Journavx became the first oral, non-opioid pain inhibitor to earn approval last year.
Since opioid-based medications come with potentially severe side effects, we should see Journavx attract a significant number of patients.
NASDAQ: VRTX
Key Data Points
Elsewhere, we should also see clinical and regulatory progress for the drugmaker. On the regulatory side, Vertex Pharmaceuticals expects to submit applications to the U.S. Food and Drug Administration (FDA) for zimislecel, an investigational therapy for T1D that is performing well in clinical trials. It is successfully restoring patients' ability to produce their own insulin or at least decreasing insulin dependence.
The company has several other late-stage pipeline candidates that could report solid results this year, including inaxaplin for APOL-1-mediated kidney disease and povetacicept for IgA nephropathy (another type of kidney disease). There are no treatment options that target the underlying causes of these conditions, so positive results here could jolt the stock.
Vertex's market cap is currently $117.7 billion, while Pfizer's is $144 billion. If one moves up consistently and the other moves sideways (or more likely) down this year, Vertex could end up with a larger market cap by the close of 2026. At any rate, even if it doesn't, Vertex is an excellent stock to buy and hold.
2. Medtronic
Medtronic was on fire last year. The company delivered strong financial results due to the performance of several of its products, especially some relatively new launches within its Pulse Field Ablation franchise, or a portfolio of products designed to treat a heart problem called atrial fibrillation. Medtronic expects that tailwind to continue.
Meanwhile, the company also received clearance for its Hugo system, a robotic-assisted surgery (RAS) device, for use in urologic procedures. This was a long time coming. The Hugo shouldn't contribute significantly to Medtronic's financial results this year, but it helps paint a brighter picture for its long-term prospects, which matters for stock market performance.
The medical device specialist should seek more indications for the Hugo system, perhaps as early as this year. The device has already performed well in hernia repairs. And we should start seeing what the market demand for the Hugo will look like this year. Strong financial results coupled with clinical and commercial progress for Hugo paint a bright picture for Medtronic's year.
NYSE: MDT
Key Data Points
There may be one hiccup. The company will split with its diabetes care unit by the end of this year, thereby becoming a smaller company with a smaller market cap -- which is currently $129 billion. Even with that caveat, Medtronic could end the year with a larger market cap than Pfizer. For one, during Medtronic's fiscal year 2025, which ended April 25, 2025, diabetes care accounted for 8% of revenue but only 4% of operating profits.
It's not clear how much the market cap will adjust after the separation, but it should shave off less than 10% of Medtronic's value, which, if it were to happen today, would give it a market cap around that of Vertex. Second, Medtronic will unlock significant value, growth prospects, and stronger operating margins as a result of that transaction, and may command a higher valuation and market cap as a result. So, this move won't harm its ability to perform well in 2026 and overtake Pfizer in terms of market value.
