Why This Biotech ETF — The IBD Stock Of The Day — Just Reentered Its Buy Zone

 The SPDR S&P Biotech ETF (XBI), often referred to simply as the XBI, is Monday's IBD Stock Of The Day. Shares of the exchange-traded fund popped into a buy zone on positive news for holdings Axsome Therapeutics and Mirum Pharmaceuticals.

Biotech stocks can be tricky. Playing the ETF game is a sound strategy for getting exposure to a broad industry without the single-stock risk. Although there are laggards in the biotech realm, the industry group is making something of a comeback following four years in decline.

Observers told Investor's Business Daily in late 2025 that "the biotech winter" would end in 2026.

"You can never tell whether it's spring or fall," said Brad Stewart, an executive with advisory firm BDO. "You just know that the temperature is changing."

That's reflected in the year-to-date performance of XBI stock, which has climbed 9.5%, as of Monday's close.

Why XBI Stock Has Climbed

The XBI counts Apellis Pharmaceuticals (APLS), Travere Therapeutics (TVTX), Revolution Medicines (RVMD), Twist Bioscience (TWST) and Arrowhead Pharmaceuticals (ARWR) among its top holdings.

There are no slouches in that group. In late March, Biogen (BIIB) said it would buy Apellis for $5.6 billion. Apellis sells treatments for eye and rare diseases. Last month, Travere won Food and Drug Administration approval for its drug, Filspari, in a new kidney disease.

Also, bullishly, Revolution Meds' experimental drug doubled the length of time pancreatic cancer patients lived when compared to chemotherapy. The news sent Revolution stock flying more than 40% on April 13.

On Monday, Twist delivered a top-line beat and raise for its first quarter, though its own shares fell 7% on light gross margins. Twist Bioscience makes synthetic DNA. Arrowhead, meanwhile, is working to expand approvals for its drug, Redemplo, in treating genetically high cholesterol. The FDA approved Redemplo in November.

Axsome and Mirum are also holdings in the XBI. On Monday, Axsome met or beat sales expectations, though higher-than-projected expenses deepened losses. Still, the biotech stock shot into a profit-taking zone, according to MarketSurge. Shares broke out of a consolidation with a buy point at 191.50 on April 27. Mirum shares also hit a record high Monday on positive test results for its liver disease drug.

Shares Hit A Buy Zone

XBI stock also jumped back into a buy zone on Monday. Shares topped the entry on a flat base on April 8. Though the stock pulled back somewhat through April 29, it was never enough to trigger a sell rule. Savvy investors are encouraged to cut their losses when a stock falls 7% to 8% below its buy point.

XBI found support near its 50-day line last week.

https://www.investors.com/research/ibd-stock-of-the-day/xbi-stock-biotech-stocks-etf/