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However, since February of this year, shares of biotech companies have underperformed. Many stocks in the industry were stung by setbacks in clinical trials, a rotation away from growth stocks, drug-pricing reforms, and delayed drug approvals. But I believe the selloff is overdone, as these factors weighing on the industry are temporary. The overall bullish growth story for biotech innovations and advancements remains. Traders are starting to agree with me as XBI has been trending upward over the past couple of trading sessions.
Investors are starting to realize that while COVID is improving in the United States, there are still parts of the world, such as India, plagued by the virus. This means eyes are back on biotech companies, as the pandemic not only brought attention to companies working on vaccines but also biotechs that were not. That is why I am recommending Gilead Sciences Inc . (NASDAQ:GILD) and Vertex Pharmaceuticals Inc. (NASDAQ:VRTX), two biotech firms I believe will see their shares rise in the months ahead.
