Palantir, Nvidia & Tempus AI Could Be Pharma ETF Darlings That Don't Make Pills

Imagine this: a hospital conference room, lights low, filled with decision-makers. A sales representative clicks through slides driven by Palantir Technologies’ PLTR Foundry platform, highlighting real-time data integration and pinpoint analytics that would make Pharma R&D from the past look like it’s still sending lab results by fax. Down the same hallway, Tempus AI TEM is making its pitch: a genomics-driven diagnostics pipeline that has the potential to condense drug development months into weeks. Down the street, Recursion Pharmaceuticals RXRX, connected to Nvidia’s NVDA AI muscle, is whipping up molecules more quickly than most of the major pharma companies can convene a patent meeting.

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This isn’t a sci-fi movie. It’s 2025. And it’s the future of medicine.

But what if you peek under the hood of most healthcare ETFs, and find the list still dominated by old-school giants: Pfizer PFE, Merck MRK, Johnson & Johnson JNJ, all good revenue machines, yes, but now stalled in terms of stock momentum and innovation hype. So the elephant-in-the-room question hangs: are ETF issuers missing the real excitement in AI-native biotech?

The ETF Landscape: Are We Still Wearing 2015 Goggles?

Even with this tectonic shift in where innovation is really occurring, the world of ETFs hasn’t yet caught up. The Health Care Select Sector SPDR Fund XLV remains top-heavy in UnitedHealth UNH, and Eli Lilly LLY. The iShares U.S. Pharmaceuticals ETF IHE is laser-beamed on the usual suspects.

However, very few thematic funds such as the ARK Genomic Revolution ETF ARKG have piled into Tempus AI and Recursion — although Cathie Wood’s ARK is infamous for dipping its toes into Palantir waters.

It raises the question: if AI is reshaping healthcare at its source — the molecule, the diagnosis, the trial protocol — why are investors still paying for exposure to the output, rather than the architects?

Also Read: 3 Pharma Stocks That Aren’t Sweating the Coming 200% Drug Tariffs

AI-Native Pharma Is Already A Thing And It’s Moving Fast

Let’s begin with the numbers. Palantir is up more than 11% in the past month and has already shown a phenomenal YTD performance as investors prepare for its Q2 earnings. The company’s expansion into healthcare is no side gig, it’s quietly establishing itself as the digital scaffolding for hospital systems and military-grade medical planning, too.

Tempus AI, though experiencing a modest 6% retreat in the last month, has remained firm at around $64, indicating market faith in its capability to use AI to industrialize cancer diagnosis. And Recursion Pharmaceuticals has been up 15% since late June, while remaining in loss for the year, a classic biotech early-stage pattern, but now infused with algorithmic drug discovery.

NVIDIA, whose chips reside at the center of Recursion’s wet-lab-meets-silicon-brain hybrid model, remains the underlying facilitator of this whole thing.

And Big Pharma, meanwhile? Pfizer languishes at around $24, while Merck hovers at around $85, not exactly the material for breakout tales.

The ETF Opportunity

The pressure is obvious. Conventional drugmakers still control manufacturing, regulation, and distribution. But AI-first companies are beginning to own the upstream, the concepts, the iterations, the trial designs. And in a space where delays in R&D can run into billions and cost patient lives, speed and accuracy are no longer niceties — they’re necessities.

ETF providers now have a choice. Are they going to keep tracking yesterday’s winners in healthcare, or pre-emptively shift portfolios towards the players really shaping tomorrow’s innovation?

There is an open invitation here to innovating. A specially designed “AI & Next-Gen Healthcare ETF” that combines genomics-based diagnostics, machine learning-assisted discovery, and healthtech infrastructure could grab the very growth that conventional pharma ETFs are not seeing.

The Bottom Line

Palantir, Tempus AI, and Recursion are not merely healthcare-adjacent technology companies. They’re the leading edge of a very lucrative spear — one that already has pieced biotech’s old armor. And although Big Pharma is still, well, pharma, it’s the AI-born upstarts who are flexing the future.

The ETF business might need to begin paying attention, because the actual biotech bull cycle may not be occurring in corner offices, but in server racks, sequencing labs, and real-time data dashboards.

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