MDT Stock: This Could be a Big Year for Medtronic

Medtech is in an exciting place right now. 

Artificial intelligence (AI), predictive monitoring, digital twin simulations and robotics are all driving rapid innovation across the sector.

R&D activity is set to expand, both at established firms and startups with potentially disruptive technologies, particularly those leveraging complex data, real-time analytics, edge computing and edge AI.

Regulatory frameworks are also evolving. In February 2026, the FDA will replace its decades-old Quality System Regulation with a modernized Quality Management System Regulation. 

In Europe, meanwhile, the EU’s AI Act and European Health Data Space Regulation will push the sector toward greater transparency.

Medtronic [MDT] is at the forefront of many of these developments. 

Founded in 1949 as a medical electronics repair shop in Minnesota, it pioneered cardiac pacemakers, insulin pumps and advanced surgical systems, expanding through innovation and acquisitions. Over decades, Medtronic has grown into a diversified healthcare giant, spanning cardiovascular, diabetes, neurological and surgical technologies worldwide.

The firm’s Q2 results, released in November 2025, beat expectations.

Revenue rose 6.6% to $9bn, led by a 10.8%% surge in cardiovascular sales — the firm’s best outside the Covid-19 pandemic in over a decade. Cardiac ablation grew 71% year-over-year, with the Affera pulsed field ablation system doubling its install base. 

The company raised full-year guidance, lifting revenue growth to 5.5% and EPS to $5.62–5.66.

MDT stock climbed steeply following the results, although it has dipped since then. It is up 16.02% over the past 12 months as of the January 16 close.  

Going into 2026, commentators and investors alike are buoyant about Medtronic’s prospects. 

Medium-term Tailwinds for MDT Stock

In May 2025, Medtronic said it would spin off its diabetes unit into a standalone, publicly listed company, with the deal expected to close by year-end 2026 based on management’s guidance. 

The rationale for this move is compelling, and a number of commentators have expressed approval. 

Principally, Medtronic has struggled to keep up with rivals in key areas of diabetes care, notably continuous glucose monitoring, while facing intensifying competition in insulin pumps. In addition, diabetes is also the group’s only direct-to-consumer business and delivers materially lower operating margins than its other divisions. 

Exiting the unit will sharpen Medtronic’s focus on higher-margin B2B segments and could help unlock more profitable, sustainable growth.

Elsewhere, in December 2025, Medtronic secured US regulatory clearance for Hugo, its robotic-assisted surgery system, initially for urologic procedures. While the approval is unlikely to drive near-term revenue growth, it opens a significant long-term opportunity. Robotic surgery remains underpenetrated despite clear advantages in minimally invasive care. Although competition is intense, growing shipments and expanded indications should allow Hugo to become a meaningful contributor over time.

The company has also announced it will be making acquisitions as it looks to expand and diversify its portfolio.

At the JPMorgan Healthcare Conference in San Francisco earlier in January, executives said the firm has “significant firepower” to pursue acquisitions.

The company is focused on tuck-in deals, particularly in cardiology and neuroscience, with a preference for assets that are early stage or close to commercialization, according to CEO Geoff Martha. 

CFO Thierry Piéton said Medtronic’s balance sheet provides ample flexibility to complete a “meaningful number” of transactions without putting pressure on its finances. He added that the company is re-accelerating its M&A activity after a quieter period, while stressing that Medtronic’s dividend policy remains unchanged. 

Management is targeting acquisitions in the low- to mid-single-digit billions of dollars, Reuters reported, aiming to complement internal R&D rather than replace it. To speed execution, Medtronic has also established a new board-level committee focused on dealmaking.

In parallel to this, the company has pursued various collaborations, including a recently announced partnership with Precision Neuroscience to integrate its StealthStation surgical platform with Precision’s Layer 7 brain-computer interface.

Medtech Leaders: MDT vs BSX vs SYK

Let’s see how Medtronic measures up against two leading peers in the space.

Boston Scientific [BSX] specializes in minimally invasive interventional devices across cardiovascular, neurovascular, urology and endoscopy segments. The company has delivered double-digit organic revenue growth and expanded margins through innovation and strategic acquisitions, including a recent $14.5bn deal for Penumbra [PEN] to bolster its cardiovascular portfolio. Boston Scientific focuses on high-growth procedural markets rather than broad device categories and, with a $130.61bn market cap, slightly outstrips Medtronic in terms of size. 

Stryker Corporation [SYK], meanwhile, leads in orthopedics and surgical systems, including robotic-assisted surgery with its Mako platform, as well as neurotechnology and emergency care equipment. Its revenue growth and profitability are underpinned by strong product demand, recurring implant volumes and innovation in surgical tools. Stryker also offers a dividend, appealing to income-oriented investors. At $139.12bn, its market cap is the largest of the three.

Here go the three firms’ current fundamentals.

Source: Yahoo Finance

Medtronic, Boston Scientific and Stryker represent a scale spectrum within medtech. 

Medtronic stands at the broadest end, with diversified revenue streams across chronic care, surgical and device segments, generating scale, steady cash flows and resilience to cyclicality. Its extensive portfolio and global reach position it as a core medtech holding with moderate growth and strong fundamentals. 

Boston Scientific sits in the mid-growth tier, with a sharper focus on procedural and interventional devices. It has delivered robust organic growth and margin expansion through innovation and bolt-on acquisitions, though its earnings are somewhat more sensitive to procedure volumes and integration risk from recent deals. 

Stryker excels in orthopedics and surgical robotics, combining above-average growth with attractive margins and shareholder returns including dividends. Its fundamentals reflect strong product demand and pricing power in elective and trauma procedures. 

Collectively, the three offer diversified exposure across medtech’s core growth drivers with varying risk-return profiles.

Conclusion: The Investment Case for MDT Stock

The Bull Case for Medtronic

Medtronic stands out as a compelling option for income-focused investors. The healthcare group has raised its dividend for 48 consecutive years and currently offers a forward yield of around 3%. It is on course to achieve Dividend King status — defined as 50 straight years of dividend growth — within the next few years, with a strong likelihood of sustaining dividend increases well beyond that milestone. This income appeal is reinforced by Medtronic’s resilient free cash flow generation, investment-grade balance sheet and diversified end markets, which collectively underpin dividend durability across economic cycles.

The Bear Case for Medtronic

Despite its defensive appeal, Medtronic faces several headwinds. Organic growth has lagged faster-growing medtech peers, while execution challenges in diabetes and cardiac devices have weighed on margins. Ongoing pricing pressure, rising input costs and regulatory scrutiny could limit near-term profitability. In addition, higher R&D and restructuring spend may constrain earnings leverage, raising the risk that dividend growth slows if operational momentum does not improve.