Biotech is having a moment, and the numbers are hard to ignore. The SPDR S&P Biotech ETF (NYSEARCA:XBI) climbed 17.27% over the trailing month ending July 1, 2026, a run that would look right at home in the AI trade. The twist: XBI owns exactly zero shares of NVIDIA (NASDAQ:NVDA | NVDA Price Prediction), the chipmaker that has defined this cycle’s growth narrative.
Over the same month, NVIDIA shares fell 11.84%, and the S&P 500 slipped 1.94%. A high-flying growth fund ripping higher while the AI leader cooled off is exactly the kind of rotation worth watching for retirement-focused investors.
What XBI Actually Is
XBI is State Street’s SPDR-branded biotech ETF, structured to give equal-weighted exposure to the biotech industry rather than concentrating capital in a handful of megacaps. The fund carries a net expense ratio of 0.35%, a low-cost profile consistent with passive sector exposure.
Because the sleeve is equal-weighted, the top 10 positions represent just 12.76% of net assets. There is no single dominant holding, and there is no megacap tech name propping up returns.
Why It’s Up: The Holdings Doing the Work
Per the fund’s most recent fact sheet dated April 22, 2026, the top 10 holdings are all pure-play biotech and pharmaceutical names:
| Rank | Holding | Weight |
|---|---|---|
| 1 | Apellis Pharmaceuticals | 1.83% |
| 2 | Alkermes | 1.45% |
| 3 | Madrigal Pharmaceuticals | 1.38% |
| 4 | TG Therapeutics | 1.35% |
| 5 | Insmed | 1.34% |
| 6 | Scholar Rock Holding | 1.30% |
| 7 | Apogee Therapeutics | 1.28% |
| 8 | Protagonist Therapeutics | 1.25% |
| 9 | Summit Therapeutics | 1.24% |
| 10 | United Therapeutics | 1.24% |
These are small- and mid-cap biotech developers with programs across obesity treatments, rare diseases, oncology, and immunology. Industry-outlook research from PineBridge Investments flagged that obesity treatments and advanced medical devices are expected to expand market opportunities in 2026, and that new pricing agreements and trade deals have alleviated some of the pricing tail risk that hung over the sector.
The Absence Angle: Why NVIDIA Is Not Here
NVIDIA’s absence from XBI is a methodological outcome of the fund’s index rules. XBI’s index screens the biotech industry classification within the S&P Total Market Index. NVIDIA is a semiconductor company; NVIDIA’s business is driven almost entirely by data center and AI infrastructure demand. It is ineligible for XBI on sector grounds.
That design suits investors trying to diversify away from the concentration risk the Magnificent 7 introduces into most cap-weighted funds. Goldman Sachs’ 2026 outlook noted the question of whether the market can withstand a marked reversal and broad unwind of AI-related investments. Owning a rally driver that has no AI chip exposure is one way retail investors have sought to answer that.
Context and Caveats
Zoom out and the pattern gets stronger. XBI is up 28.51% year-to-date and 89.27% over the trailing year, well ahead of the S&P 500’s 9.22% YTD and 20.04% one-year gains. Retail sentiment on Reddit has trended bullish on the fund.
The trade-off is concentration by sector rather than by name. XBI’s equal-weight design cuts single-stock risk, but every holding is tied to clinical trials, FDA decisions, and drug pricing policy. Funds that DO hold NVIDIA, like broad growth or Nasdaq-100 ETFs, offer megacap AI exposure at the cost of tech dependency. XBI offers the opposite: pure biotech beta, no AI hedge, no megacap ballast. The five-year return of just 15.38% is a reminder that biotech goes through long stretches of underperformance between rallies like this one.
Past performance does not guarantee future results, and none of this is investment advice. XBI is a punchy way to add biotech exposure without paying up for a single name, and its current rally has come without any help from the AI complex. Whether that fits a specific portfolio depends on how much sector risk a reader is willing to carry, and whether they see the biotech rebound as durable or already stretched.
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