Here’s Why Wall Street Still Sees Room in Labcorp (LH) Even After Its Run Farooq Mon, November 9, 2026 at 1:47 PM EST 4 min read LH +1.56% ^GSPC +2.39% Trade LH on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
We just published a list of the 10 Best All-Time High Stocks to Buy According to Wall Street and Labcorp (NYSE:LH) ranked 10th on this list.
Wall Street's leadership changed hands over the past month. The technology and chip stocks that carried the market through most of 2026 lost ground, while healthcare, financials, real estate, utilities and consumer-focused stocks took over.
The scoreboard showed it in mid-October. Healthcare led gains among the S&P 500's 11 sectors and hit a record high, financials rose 1%, real estate climbed 1.7% and utilities added 1.2%, while technology slipped 0.3%. The S&P 500 value index gained 0.9% that day as its growth counterpart dipped 0.2%. Jim Baird, chief investment officer at Plante Moran Financial Advisors, tied the move to doubts about AI payoffs: "Investors are looking for other opportunities outside of tech, and healthcare is one of the beneficiaries of that."
The rotation sped up in November. On Monday, investors moved into consumer cyclical, financial services and consumer defensive stocks, and the main technology sector fund was down 2.4% by mid-afternoon. Last Thursday, the Philadelphia Semiconductor Index fell as much as 11%, its worst showing since March 2020, and the Nasdaq Composite slid into a correction, a drop of at least 10% from its record close in early October. The VIX, Wall Street's fear gauge, jumped more than 65% in a day. In short, money moved toward companies with steadier earnings and away from the most crowded trades.
Sameer Samana, senior global market strategist at Wells Fargo Investment Institute, said the pain was concentrated: "Anything related to AI is down more than anything not related to AI." Our ranking of stocks sitting near all-time highs that Wall Street favors looks at names that have held up through the swings.
Samana described the shift as a change of buyers. The first wave of AI investors chased growth, he said, while a newer group wants companies with healthy cash flow, and he noted that many AI stocks are still not cheap. Will Compernolle, a macro strategist at FHN Financial, said the selling in chipmakers was sending money into Treasuries, and that investors were also rotating from chipmakers into the biggest spenders on AI data centers.
We covered the group that led October's gains in our list of healthcare stocks that hedge funds favor. Not everyone reads the selloff as a verdict on the economy. Charlie McElligott, a cross-asset strategist at Nomura, said it reflected hedge funds locking in their 2026 gains rather than a worsening in fundamentals.
Labcorp made it to our list because it has an average upside potential of 7%. Labcorp's profit is growing about twice as fast as its sales, and management raised its outlook again after the third quarter. Revenue rose 6.9% from a year earlier, while adjusted earnings per share climbed 14.5%. Chairman and Chief Executive Officer Adam Schechter pointed to continued margin expansion behind the gap. The gap shows the gains are not coming from volume alone: the company is keeping more of each dollar it brings in.
The lab operator is also buying more testing volume. It closed its purchase of MLM Medical Labs in the quarter. Since then it has signed agreements to take select BioReference Health lab assets, Myriad Genetics' prenatal health testing business and Millennium Health, each still waiting on regulatory approval. Cash is paying for much of this: free cash flow came to $412.2 million, up from $280.5 million a year earlier.
Management now expects 2026 adjusted earnings of $18.30 to $18.70 per share, up from a range of $18.10 to $18.55. Whether the discount is worth the cost of all that spending is the question in our look at Labcorp's earnings discount and growing investment bill.
While we acknowledge the potential of LH as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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This article is originally published at Insider Monkey.
