The increasing usage of smart wearable devices has made an impact not only on the lifestyle of the users, but also on biological research and personalized healthcare services. These devices, which carry different types of sensors, have emerged as personalized digital diagnostic tools. Data from such devices have enabled the prediction and detection of various physiological as well as psychological conditions and diseases. In this review, we have focused on the diagnostic applications of wrist-worn wearables to detect multiple diseases such as cardiovascular diseases, neurological disorders, fatty liver diseases, and metabolic disorders, including diabetes, sleep quality, and psychological illnesses. The fruitful usage of wearables requires fast and insightful data analysis, which is feasible through machine learning. In this review, we have also discussed various machine-learning applications and outcomes for wearable data analyses. Finally, we have discussed the current challenges with wearable usage and data, and the future perspectives of wearable devices as diagnostic tools for research and personalized healthcare domains.