Last year,Morgan Stanleyupgraded its outlook for the U.S. MedTech sector to "Attractive," believing the concerns around GLP-1s were already reflected in stock prices and that fundamentals were strong.

However, this view didn't play out as expected, mainly due to unforeseen, company-specific issues, such asDexCom, Inc's(NASDAQ:DXCM) unexpected Q2 channel mix challenges,Edwards Lifesciences Corporation's(NYSE:EW) slowdown in TAVR procedures,TransMedics Group, Inc's(NASDAQ:TMDX) seasonal impacts, andiRhythm Technologies, Inc's(NASDAQ:IRTC) DOJ investigation.

Morgan Stanley is bullish on the MedTech industry as volumes and pipelines continue to be...