Josh Brown Says ‘Take a Break From AI CapEx World,’ Highlights His 2 Top Healthcare Stock Picks

In a recent CNBC interview, Josh Brown, CEO of Ritholtz Wealth Management, suggested taking a break from the AI and data-center spending theme and highlighted Incyte (NASDAQ: INCY) and Biogen (NASDAQ: BIIB) as two of his top stock picks. Brown emphasized the need to discuss stocks that are not associated with the AI capex world. He expressed appreciation for Biogen's strong fundamentals and earnings performance, but the focus of this article will be on Incyte, which has seen a 22% increase this year.

Brown's enthusiasm for Incyte is driven by its impressive earnings momentum and an expanding drug pipeline. The company is currently developing nine or ten drugs at various stages of development, providing multiple potential growth catalysts. Incyte Corporation (NASDAQ: INCY) specializes in developing drugs for blood cancers, solid tumors, and inflammatory skin diseases.

In July's quarterly results, Incyte reported a 38% year-over-year revenue increase and a 40% jump in net product sales, both surpassing Wall Street estimates. The company's key product, Jakafi, treats two blood cancers and a complication of bone marrow transplants. Jakafi sales rose by 7% in the quarter, and prescriptions filled increased by 9%. Opzelura, a skin cream, experienced a 24% sales increase after removing one-time benefits.

Investors are optimistic about Incyte's diversification, as the company is projected to reach $3 billion to $4 billion in net sales by 2030, even if Jakafi loses exclusivity. The company has also raised its full-year fiscal 2026 sales guidance by approximately 7% and lifted the Opzelura outlook by roughly 40%. By the end of fiscal 2026, Incyte expects around ten clinical data readouts, including four from registrational trials, which may serve as strong catalysts.

However, some analysts are cautious, pointing out that Jakafi still represents a significant portion of Incyte's net sales and could lose exclusivity in key regions by 2028. The success of the company will largely depend on new launches and effective catalysts before then. Competition is also increasing, as AbbVie recently secured approval for Rinvoq in non-segmental vitiligo, which may impact Incyte's European vitiligo business.