Biotech stocks focus on companies developing new and previously unimaginable ways to treat and prevent diseases. Many of the strongest players pair promising drug pipelines with successful treatments already on the market.
Some scientists believe that we’re in the golden age of biotechnology. If you’re looking to invest in this fast-moving space, a few biotech stocks stand out right now.
Top biotech stocks for 2026
| Name and ticker | Market cap | Dividend yield | Industry |
|---|---|---|---|
| Axsome Therapeutics (NASDAQ:AXSM) | $9.1 billion | 0.00% | Pharmaceuticals |
| BioNTech Se (NASDAQ:BNTX) | $24.0 billion | 0.00% | Biotechnology |
| Exelixis (NASDAQ:EXEL) | $11.5 billion | 0.00% | Biotechnology |
| Regeneron Pharmaceuticals (NASDAQ:REGN) | $79.2 billion | 0.48% | Biotechnology |
| Vertex Pharmaceuticals (NASDAQ:VRTX) | $110.8 billion | 0.00% | Biotechnology |
1. Axsome Therapeutics
NASDAQ: AXSM
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2. BioNTech
NASDAQ: BNTX
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NASDAQ: EXEL
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NASDAQ: REGN
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5. Vertex Pharmaceuticals
NASDAQ: VRTX
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How to invest in biotech stocks
The following are key steps to take to invest in biotech stocks:
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for your biotech stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Benefits and risks of investing in biotech stocks
The benefits of investing in biotech stocks include:
- Significant growth potential
- Portfolio diversification with low correlation with the overall market
- An opportunity to invest in the development of potentially life-saving treatments
However, there are also risks associated with investing in biotech stocks, including:
- The potential for clinical trial failures
- The potential for regulatory setbacks
- Competitive threats
Should you invest in biotech stocks?
Reasons to invest in biotech stocks include:
- Biotech stocks offer the potential for significant returns.
- Some biotech companies have strong financial positions, which lowers their risk.
- Biotech stocks can perform well even when the overall stock market isn't.
On the other hand, reasons you might not want to invest in biotech stocks include:
- Biotech companies' drug candidates can prove ineffective, or even worse, in clinical testing.
- There's no guarantee that pipeline candidates will win regulatory approvals.
- Even if a biotech company's drug wins approval, it might not be successful commercially.
- Small clinical-stage biotech companies might have to dilute their shareholders' holdings by issuing new stock to raise cash.
Related investing topics
FAQ
Biotech stocks FAQ
About the Author
Keith Speights has positions in Bristol Myers Squibb, Pfizer, and Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Axsome Therapeutics, Bristol Myers Squibb, Exelixis, Pfizer, Regeneron Pharmaceuticals, and Vertex Pharmaceuticals. The Motley Fool recommends BioNTech Se. The Motley Fool has a disclosure policy.
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