If you look at the chart for the iShares US Medical Devices ETF (IHI), you might think the sector is flattening. After a decade of being the steady pulse of a healthcare portfolio, medical device stocks have entered 2026 in what can only be described as a state of cardiac arrest.

Between the rise of GLP-1 fever and a new wave of tariff-induced margin pressure, the industry is currently waiting for a jolt of electricity to come back to life.

Here are IHI’s top 10, representing nearly three-quarters of all exchange-traded funds (ETFs). A mix of household names for consumers and familiar names for professional investors.

The basket of stocks in this ETF industry isn’t cheap at 30x earnings. This is despite losing money (in share price terms) over the past 12 months.

The weekly chart indicates to me that there is a possible “look below” moment in the near future. As in $44 if the current selling pressure continues throughout the market. That’s 20% or more down. There are no guarantees, just a note that the risk is high.

Another way to look at it is in the way of its ROAR score, which has steadily declined since peaking at 80 (very low risk) three months ago. At the time of writing, IHI’s ROAR score stands at 20, implying an above-average risk of major losses.

Here’s the “emergency” report on why this former flyer needs the paddles.

The biggest threat to the medical device business, especially the group’s old guard, is not a competitor. It’s a syringe. The explosion of GLP-1 weight-loss drugs such as Zepbound and Wegovy has fundamentally changed the 2026 outlook for chronic disease management.

Investors are betting that if the world gets thinner, we’ll need fewer knee replacements, fewer heart valves and fewer sleep apnea machines. While the actual data on procedure volume remains healthy for now, the fear of a future without chronic obesity is acting as a strong sedative on these share prices.

Medical devices are a global business with a massive reliance on international supply chains. The US has raised significant tariffs on medical imports from China, Europe and India. For some of these companies, this is a direct hit to the bottom line. They face the dual pressure of rising component costs and a limited ability to raise prices for hospitals already operating on thin margins.

Despite grim vital signs, there are signs of life if you know where to look.

Companies that integrate artificial intelligence (AI) and digital monitoring are the ones holding the shovels. The US Food and Drug Administration (FDA) has approved more than 100 new AI-enabled radiology applications in the past year alone. Companies that can demonstrate that their devices save hospitals money through predictive maintenance or remote control are starting to see their charts rise.

The medical device sector, tracked by IHI, is currently in a “show me” phase. It has underperformed the broader S&P 500 for a while, and there are too many headwinds that need to subside before it can see green again here.

Rob Isbitts created the ROAR scorebased on his more than 40 years of experience in technical analysis. ROAR helps do-it-yourself investors manage risk and build their own portfolios. Your weekly letter to the investor can be accessed at ETFYourself.com. To copy Rob’s portfolios, see the new PiTrade app. And for a change of pace, here’s his new blog on racehorse ownership as an alternative asset HorseClaiming.com.

As of the date of publication, Rob Isbitts had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com