Technology and AI-linked companies make up a significant proportion of the US stock market. As investors look to spread risk beyond this concentration, healthcare stands out for its different return drivers - and for its potential to benefit from AI adoption itself.
What you should know
1.
AI concentration is reshaping diversification
By July 2026, technology and AI-linked stocks were estimated to make up around 42% of the US stock market, up from 27% in 2023.¹ This high level of ‘concentration’ is prompting investors to look for other exposures driven by different sources of potential return.
2.
Healthcare flows have accelerated
Global healthcare exchange-traded products (ETPs) had attracted more than $10 billion year-to-date by July 2026, 17% more than in all of 2025, suggesting increased interest from investors.²
3.
The iShares Take: Healthcare can diversify AI risk, and potentially benefit from AI
Healthcare has historically held up better when AI-linked stocks have struggled,³ and AI adoption could improve the sector’s productivity.4
Explore healthcare ETFs and market insights
See the wider market outlook
Explore the latest iShares outlook for broader context on the themes shaping markets and portfolios.
Catch up on recent market moves
See the latest Market Wrap for additional context on what's been moving markets and why it may matter to investors.
Compare healthcare ETFs
Explore healthcare ETFs to see different ways investors can gain exposure to the healthcare sector.
Why are investors looking beyond AI-heavy markets?
Technology and AI-linked stocks have become a much larger part of the US stock market. By July 2026, they were estimated to account for around 42% of the US market's total value, up from 27% in 2023.¹ When a large share of a market is driven by similar forces, investors may look to supplement this with investments in other companies and industries that have different sources of potential return.
Healthcare is one example. The sector spans pharmaceuticals, biotechnology, medical technology and healthcare services, and is typically influenced by trends such as ageing populations and healthcare spending. These differ from the forces driving technology, while demand for medicines, treatments and care can persist across different economic environments.
Investor demand has also picked up. Global ETPs had attracted more than $10 billion of inflows year-to-date by July 2026, 17% more than in all of 2025.²
Takeaway: Tech and AI concentration in the S&P 500 rose from 27% in 2023 to 42% in 2026.
Source:
BlackRock Aladdin, as of 31 July 2026. Indices are unmanaged and one cannot invest directly in an index. ‘AI beneficiary basket’ based on a proprietary list of stocks compiled by BlackRock, representing exposure to the AI theme.
What does this mean for investors?
Healthcare may give investors exposure to return drivers that differ from technology, which can make it relevant when thinking about diversification. BlackRock analysis found that on the worst 5% of days for AI-linked stocks relative to the MSCI World since 30 November 2022, healthcare outperformed the global market 98% of the time.³
Healthcare is not an ‘anti-AI’ exposure. AI is already being applied in areas such as drug discovery, diagnostics and hospital operations, where it could improve efficiency and productivity over time. That puts the sector in an unusual position: it can potentially act as both a diversifier from AI stocks and a beneficiary of the technology.
Takeaway: Global healthcare ETP inflows had exceeded full-year 2025 levels by July 2026, reaching more than $10 billion year-to-date.
Source:
BlackRock and Markit, as of 24 July 2026.
Explore further
Explore healthcare innovation
If you want to explore a healthcare-focused investment route, review the Healthcare Innovation ETF product page.
Compare other healthcare ETFs
Explore healthcare ETFs to see different ways investors can gain exposure to the healthcare sector.
Understand thematic investing
See how thematic investing can provide targeted exposure to long-term trends like healthcare, and how that differs from investing in a broad market.
Frequently asked questions about healthcare and AI diversification
Past performance is not a reliable indicator of current or future results.
The value of investments can fall as well as rise, and investors may not get back the amount originally invested.
1. Tech and AI concentration: Source: BlackRock Aladdin, as of 31 July 2026. Indices are unmanaged and one cannot invest directly in an index. ‘AI beneficiary basket’ based on a proprietary list of stocks compiled by BlackRock, representing exposure to the AI theme.
2. Healthcare ETP flows: BlackRock and Markit as of 24 July 2026.
3. AI-relative performance: The figures shown relate to past performance. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy. Source: BlackRock Fundamental Equities. Analysis based on the worst 5% of daily relative returns of the Morningstar Global AI Select Index versus the MSCI World since 30 November 2022. AI active return strips out broad market moves to isolate AI-specific relative stress. Index returns do not reflect management fees, transaction costs or expenses; indexes are unmanaged and cannot be invested in directly.
4. National Academy of Medicine, "Artificial Intelligence in Health Care" (2022); NEJM Review, "Artificial Intelligence in U.S. Health Care Delivery" (2023); Nature npj Digital Medicine (2024) and McKinsey and Deloitte Healthcare AI research (2024).