Company Overview

Medtronic delivered a stunning earnings beat just hours ago this morning, with fiscal Q2 2026 results that sent shares soaring over 5% to break through $100 – a psychological milestone the stock hasn’t reached in over three years. The medical device giant reported adjusted EPS of $1.36, crushing analyst expectations of $1.31, while revenue of $9.0 billion surpassed estimates of $8.87 billion. The 6.6% revenue growth represents organic acceleration to 5.5%, marking the strongest cardiovascular performance in over a decade outside pandemic comparables.

What makes this morning’s results particularly compelling is the perfect timing with healthcare’s massive sector rotation currently underway. As the article from yesterday noted, healthcare stocks just saw their biggest weekly inflows since January 2021 as investors flee overvalued tech for the sector’s defensive cash flows and attractive 20x forward P/E versus tech’s 30x multiple. Medtronic is emerging as a primary beneficiary, with its Cardiovascular Portfolio posting 10.8% revenue growth – including a jaw-dropping 128% surge in U.S. cardiac ablation driven by its pulsed field ablation (PFA) technology. The company immediately raised full-year guidance, now targeting 5.5% organic revenue growth (up from 5%) and adjusted EPS of $5.62-$5.66.

Key Technical and Fundamental Drivers

This Morning’s Beat → $1.36 vs. $1.31 Expected
Medtronic’s earnings released just hours ago showed adjusted EPS of $1.36 on $9.0 billion revenue, both beating estimates, triggering a 5%+ rally that pushed shares through the critical $100 psychological barrier to 52-week highs.

Cardiac Ablation Explosion → 128% U.S. Growth
The PulseSelect and Affera Sphere-9 pulsed field ablation systems drove 71% overall cardiac ablation growth, with 128% growth in the U.S. market as the company captures share in the $5+ billion atrial fibrillation treatment market.

Raised Full-Year Outlook → Guidance Boost
Based on strong H1 performance, management raised fiscal 2026 organic revenue growth guidance to 5.5% from 5.0%, and lifted EPS guidance to $5.62-$5.66, with the diabetes business spin-off on track for H1 2026.

Healthcare Sector Rotation → Defensive Haven
Healthcare stocks experienced their biggest weekly inflows since January 2021 this week as investors rotate from overvalued tech (30x P/E) into healthcare’s relative value (20x P/E), with XLV outperforming XLK in November.

Multiple Growth Catalysts → Pipeline Momentum
Recent FDA approvals include Altaviva for urge urinary incontinence (16M U.S. addressable market) and Symplicity for hypertension (18M U.S. addressable market), plus MiniMed 780G clearance expanding diabetes treatment options.

Market Takeaway

Medtronic’s earnings beat this morning couldn’t have come at a better moment, landing squarely in the middle of healthcare’s strongest sector rotation in nearly five years. The stock’s 5%+ surge breaking through $100 for the first time since 2022 represents more than just a good quarter – it signals a fundamental re-rating as investors recognize the company’s transformation into a growth story powered by breakthrough technologies like pulsed field ablation and emerging multi-billion dollar opportunities in hypertension treatment.

The convergence of multiple catalysts is particularly compelling: the cardiac ablation business growing at triple-digit rates, major FDA approvals creating new revenue streams, the upcoming diabetes spin-off unlocking value, and the broader healthcare sector rotation providing sustained buying pressure. With management raising guidance and Wall Street analysts maintaining positive ratings even at these elevated levels, Monday’s session could see continuation as investors who missed this morning’s move chase the momentum. The key will be watching for follow-through volume and whether the stock can hold the $100 level as support. Given healthcare’s defensive characteristics combined with Medtronic’s genuine growth acceleration, this could be the beginning of a sustained move higher rather than just an earnings pop.