Investors are pouring money into U.S. healthcare stocks, betting the sector will extend a rally after years of underperformance, driven by improving earnings, increased deal activity, and attractive valuations. Over the past three months, the S&P 500 healthcare index has risen 11.2%, reaching an all-time high and outperforming the S&P 500's 6% gain over the same period. In July, approximately 50 U.S.-listed healthcare funds attracted $2.44 billion in inflows, extending nearly $1.5 billion in inflows from June, and reversing three consecutive months of net outflows.