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Why do I say biotech gets no respect? Recently, the S&P 500 Index (SPX) was up around 9% in 2025. In comparison, the SPDR S&P Biotech ETF (XBI) was DOWN 2.9%. That’s a huge disconnect, because biotech has so much going for it.

After a bruising 2022–24 stretch, the global biotechnology market is now forecast to quadruple over the next decade. It could climb from about $1.8 trillion this year to as much as $5.7 trillion by 2034. That’s a 13.9% compound annualized growth rate (CAGR). Compare that with the global software market, expected to grow at a CAGR of 11.3%…or IT services, forecast to have an 11% CAGR…or business software, at 12.1%.

So, why aren’t more investors piling in? They’re still fighting the last war. Biotech’s last down cycle — roughly 2021 through 2024 — was one of its worst in decades, as a multitude of problems combined to beat biotechs into dust.

Now, that rough environment is changing fast. Pipelines are rich. Cash burn is down. The XBI’s valuation, as measured by price-to-earnings, is below that of the average ETF, S&P 500 sectors, and the S&P 500 as a whole. Sometimes way below.
 

There are multiple funds to play the likely rally in biotech. The XBI is the biggest. However, I’d recommend BBH. It’s smaller, but it’s still plenty liquid. And it has a higher Weiss Rating — a “C” compared to the XBI’s “D+.”

Importantly, the BBH concentrates on the larger biotechs. This market seems to favor large- and mega-cap stocks at this time. If you're looking for growth in a booming market, biotech might be the most asymmetrical opportunity in tech today.

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