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Eli Lilly (LLY) closed the most recent trading day at $1,133.00, moving -2.41% from the previous trading session. This change lagged the S&P 500's daily gain of 0.5%. Meanwhile, the Dow experienced a rise of 0.7%, and the technology-dominated Nasdaq saw an increase of 0.31%.

The drugmaker's shares have seen an increase of 15.32% over the last month, surpassing the Medical sector's gain of 5.49% and the S&P 500's loss of 0.23%.

Market participants will be closely following the financial results of Eli Lilly in its upcoming release. On that day, Eli Lilly is projected to report earnings of $9.01 per share, which would represent year-over-year growth of 42.79%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.44 billion, up 31.39% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $35.67 per share and revenue of $85.6 billion, indicating changes of +47.34% and +31.33%, respectively, compared to the previous year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Eli Lilly. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.06% lower. Eli Lilly presently features a Zacks Rank of #3 (Hold).

In the context of valuation, Eli Lilly is at present trading with a Forward P/E ratio of 32.54. This signifies a premium in comparison to the average Forward P/E of 15.58 for its industry.

Meanwhile, LLY's PEG ratio is currently 1.27. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Large Cap Pharmaceuticals was holding an average PEG ratio of 2.71 at yesterday's closing price.

The Large Cap Pharmaceuticals industry is part of the Medical sector. With its current Zacks Industry Rank of 113, this industry ranks in the top 47% of all industries, numbering over 250.

Story Continues

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Key Points

The company is expanding both approved and pipeline therapies. New indications could expand the market for existing drugs. Long-term cash flow growth could support future dividend increases.10 stocks we like better than AbbVie ›

AbbVie (NYSE: ABBV) boasts a pretty attractive dividend at more than 3%.

That's significantly higher than many other blue-chip healthcare stocks, including Eli Lilly (NYSE: LLY), Johnson & Johnson (NYSE: JNJ), and Amgen (NASDAQ: AMGN), all of which yield dividends of roughly 2% or less.

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But dividends don't increase just because management wants them to. They rise because the business generates enough cash to support them.

Following the money

This week, AbbVie presented new data from its blood cancer portfolio at the European Hematology Association (EHA) Congress.

This is one of the world's largest medical conferences focused on blood cancers and disorders, bringing together thousands of physicians, researchers, pharmaceutical companies, and healthcare professionals to present new clinical trial data and discuss emerging treatments.

The reason EHA is important is that companies often use the conference to release new data on cancer drugs, particularly therapies targeting blood cancers. Positive results presented at EHA can support regulatory approvals, label expansions, partnerships, and future revenue growth. That's why AbbVie showcased its new clinical results there.

The company's most recent presentations included data on approved therapies as well as several pipeline candidates. In total, AbbVie showcased 21 presentations spanning multiple blood cancers, including chronic lymphocytic leukemia, follicular lymphoma, multiple myeloma, acute myeloid leukemia, and diffuse large B-cell lymphoma.

AbbVie generated about $61 billion in revenue during 2025, and while immunology drugs receive most of the attention, oncology remains an important contributor.

The company's oncology portfolio generated about $6.7 billion in revenue in 2025. That's not insignificant.

That revenue helps fund research and development, debt reduction, share repurchases, and dividends.

Indeed, oncology helps diversify AbbVie's business.

Diversifying the pipeline

You may remember the company's dependence on Humira.

At its peak, Humira was one of the best-selling drugs in pharmaceutical history, generating about $21 billion in annual revenue.

That concentration created a significant risk because patents eventually expire. And when Humira lost U.S. exclusivity in 2023, and biosimilar generics entered the market, Humira revenue began declining rapidly.

Management saw this challenge coming years in advance and responded by aggressively building new growth platforms across immunology, oncology, and neuroscience.

Image source: Getty Images.

Today, drugs such as Skyrizi and Rinvoq (used to treat Crohn's disease, ulcerative colitis, and arthritis) are helping offset Humira's decline, while the company's oncology portfolio provides another important source of revenue and cash flow. The result is a much more diversified business than just a few years ago.

Today, AbbVie generates revenue across immunology, neuroscience, and oncology. That has reduced dependence on any single product and created a more resilient cash flow profile.

And that's why the EHA presentations are relevant.

AbbVie is actively expanding the use of existing drugs while advancing newer therapies that could eventually offset declines from older products. The company highlighted encouraging efficacy data across multiple studies, including late-stage programs and investigational treatments targeting difficult-to-treat blood cancers.

Of course, you can't guarantee successful drug development.

Clinical setbacks happen, and not every program succeeds. It's just part of the overall process of developing new therapies.

Still, AbbVie's oncology portfolio is no longer dependent on a single drug. The company now has multiple approved products, several late-stage opportunities, and a broader pipeline than it did just a few years ago.

Now consider that the latest clinical updates will strengthen the revenue engine supporting the dividend over the long term.

AbbVie's oncology business already generates billions of dollars annually, and management continues working to ensure that oncology remains a growth driver rather than a mature business.

That's why the company continues investing heavily in expanding existing therapies into new indications while advancing next-generation treatments for blood cancers and solid tumors.

Every successful clinical trial creates the potential for new approvals, larger patient populations, and longer revenue runways. And because cancer treatments often command premium pricing and can remain on the market for many years, successful oncology drugs can become meaningful cash-generating assets.

And ultimately, it's cash flow that pays dividends.

Should you buy stock in AbbVie right now?

Before you buy stock in AbbVie, consider this:

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Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Amgen, and Eli Lilly. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Investing.com -- Elon Musks SpaceX sagte am Donnerstag, dass es seine Initialpublikumsangebote bei 135 US-Dollar pro Aktie auf Donnerstag bewertet hat und dabei 75 Milliarden US-Dollar in den größten IPO der US-Geschichte aufgebracht hat.

Das Unternehmen verkaufte 555,56 Millionen Aktien und wertete den Raketen- und Raumfahrzeughersteller bei einer beeindruckenden 1,77 Billionen US-Dollar ein. Die Bewertung basiert auf 13,08 Milliarden ausgegebenen Aktien.

Die Bewertung stellt einen Rekord für eine Initialpublikumsangebote dar. SpaceX wird an der Nasdaq (NASDAQ:NDAQ) am Freitag den siebten Platz unter den in den USA gelisteten Unternehmen einnehmen.

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Mergers and acquisitions (M&A) activity across pharmaceutical and biotech sectors has accelerated significantly in 2026, extending the strong recovery that began in 2025.

A recent surge in dealmaking underscores the industry's focus on portfolio expansion and continuous pipeline innovation, alongside a growing emphasis on AI-driven drug discovery. Oncology and immuno-oncology companies have always been at the top of acquisition targets. Major players are actively pursuing licensing agreements and collaborations around promising drugs and candidates to further strengthen and diversify their core portfolios.

Quick Take on Recent M&A Deals

Pharma conglomerate Johnson & Johnson recently announced that it will acquire Firefly Bio for $1 billion and gain access to its Firelink degrader antibody conjugate platform. The deal strengthens Johnson & Johnson's oncology pipeline by adding a targeted approach for KRAS-driven cancers, supporting its efforts to develop treatments for some of the most common and challenging solid tumors.

Other pharma giants Eli Lilly LLY and Novartis NVS have been on an acquisition spree this year.

Lilly recently announced agreements to acquire Curevo, LimmaTech Biologics, and Vaccine Company, expanding its infectious disease research and development capabilities.

Lilly has been actively expanding its pipeline through acquisitions. LLY is all set to acquire Ajax Therapeutics, which will add AJ1-11095, a potential first-in-class oral type II JAK2 inhibitor currently in phase I testing for myelofibrosis patients previously treated with type I JAK2 inhibitors, to its pipeline.  The company also announced a deal to acquire clinical-stage biotechnology company Kelonia Therapeutics, Inc, a pioneer in vivo gene delivery.

The company had earlier agreed to acquire Centessa Pharmaceuticals for up to $7.8 billion, which will add orexin-based sleep disorder candidate cleminorexton to its pipeline. Lilly also struck a deal worth up to $2.4 billion for Orna Therapeutics, to gain access to its circular RNA-based immune cell engineering platform. Lilly also acquired Ventyx Biosciences to strengthen its portfolio of oral therapies targeting inflammatory diseases.

Swiss pharma bigwig Novartis, too, has been very active on the M&A front.  NVS is set to acquire Excellergy Inc., strengthening its immunology pipeline with a focus on food allergies and other IgE-mediated conditions. The deal brings in EXL-111, a phase I, half-life-extended anti-IgE antibody.

Earlier this year, Novartis acquired Avidity Biosciences, adding its antibody oligonucleotide conjugate (AOC) platform and three late-stage programs, further bolstering its neuromuscular pipeline.

Story Continues

Last month, Merck MRK acquired Terns Pharmaceuticals for $53 per share in cash. The deal adds TERN-701, a potential best-in-class treatment for chronic myeloid leukemia that recently received FDA Breakthrough Therapy Designation. The acquisition strengthens Merck's oncology pipeline.

Among biotech giants, Gilead Sciences, Inc. GILD is ramping up its external innovation strategy through targeted acquisitions to strengthen its pipeline and reduce reliance on its core HIV franchise.

Gilead and partner Lakefront Biotherapeutics (formerly known as Galapagos) recently acquired Ouro Medicines, adding gamgertamig, a clinical-stage BCMAxCD3 T-cell engager, to strengthen their autoimmune disease and inflammation pipeline.

Last month, Gilead acquired Tubulis, a clinical-stage biotech focused on developing next-generation antibody-drug conjugates (ADCs), strengthening its oncology pipeline.

Earlier this year, GILD acquired Arcellx for about $7.8 billion. The acquisition gives Gilead full ownership of anito-cel, an investigational late-stage CAR-T therapy for multiple myeloma with a potential U.S. decision by December 2026.

Another biotech giant Biogen recently acquired Apellis Pharmaceuticals $41 per share in cash plus contingent value rights worth up to an additional $4 per share tied to future sales milestones. The acquisition adds two commercialized therapies, Empaveli and Syfovre, to Biogen's portfolio. Together, the drugs generated $689 million in sales in 2025. The transaction strengthens Biogen's presence in immunology and rare diseases while establishing a foothold in nephrology.

Earlier this week, GSK plc GSK announced that it will acquire clinical-stage biopharmaceutical company Nuvalent for $10.6 billion, gaining three lung cancer assets, including late-stage ROS1 inhibitor zidesamtinib and ALK inhibitor neladalkib, both under FDA review. The deal strengthens GSK's oncology pipeline, expands its presence in lung cancer, and is expected to contribute to sales and operating profit growth beginning in 2027.

GSK earlier acquired RAPT Therapeutics to strengthen its immunology pipeline. The company also bought 35Pharma, adding HS235, a potential best-in-class therapy for pulmonary hypertension.

Last week, Servier (an independent international pharmaceutical group governed by a foundation) agreed to acquire the muscular dystrophy business of Edgewise Therapeutics in a deal worth up to $2.65 billion, including $1.55 billion upfront and up to $1.1 billion in milestone payments.

Road Ahead in 2026

Consolidation remains a key theme as companies seek to offset patent cliffs and diversify revenue streams. Acquisitions offer a faster, less risky route than in-house development, especially as innovation cycles shorten.

With strong cash reserves and increasing adoption of advanced technologies like AI, M&A activity is expected to remain robust through 2026. Smaller biotechs, often constrained by funding, will likely remain prime acquisition targets, further fueling deal momentum.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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This article first appeared on GuruFocus.

Novo Nordisk (NVO, Financials) and Eli Lilly face a new challenge as some U.S. employers reconsider coverage for GLP-1 weight-loss drugs.

Warning! GuruFocus has detected 3 Warning Sign with NVO. Is NVO fairly valued? Test your thesis with our free DCF calculator.

The issue is cost. Even though prices for drugs such as Wegovy, Zepbound and Foundayo have come down, more people are using them. That means total spending for employers is still climbing.

A Business Group on Health survey found about 10% of employers that cover GLP-1 drugs for weight loss plan to drop coverage in 2027. Mercer found 5% of large employers are considering the same move.

For workers, this could mean paying out of pocket or using direct purchase programs offered by drugmakers. For employers, it reflects a difficult balance between offering popular health benefits and controlling medical costs.

For investors, the story is more complicated. Demand for GLP-1 drugs remains strong, but coverage limits could shape how fast the market grows.

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AbbVie ABBV continues to see strong momentum from Skyrizi and Rinvoq, its two blockbuster immunology medicines. Sales of both drugs not only mitigated the impact of continued erosion in legacy drug Humira but also reaffirmed their role as AbbVie's key growth drivers.

This growth continued into 2026. In the first quarter, Skyrizi sales increased 29.2% year over year to $4.48 billion, while Rinvoq sales rose 20.2% to $2.12 billion. Together, the products were key contributors to AbbVie's double-digit revenue growth in the quarter. The company subsequently raised its 2026 revenue outlook for both medicines by $100 million each and now expects Skyrizi and Rinvoq to generate $21.6 billion and $10.2 billion in sales, respectively, this year. Combined, Skyrizi and Rinvoq are expected to deliver more than 20% growth in 2026.

A key driver behind this strength is continued demand across inflammatory bowel disease (IBD) indications, including ulcerative colitis (UC) and Crohn's disease (CD). Skyrizi has emerged as a leading therapy in the category, while Rinvoq continues to gain traction following label expansions that support earlier use in treatment. AbbVie also highlighted continued market-share gains and strong new-patient demand for both products in the first quarter.

The growth runway for both medicines remains substantial. AbbVie recently submitted regulatory applications seeking approval of Rinvoq across two indications — vitiligo and alopecia areata — and Skyrizi as a subcutaneous induction option for CD. Additional growth opportunities remain, with Rinvoq being evaluated in late-stage studies for hidradenitis suppurativa and systemic lupus erythematosus, and data readouts expected later this year. Management believes the next wave of Rinvoq indications alone could contribute roughly $2 billion in peak annual sales. Combined with continued market-share gains across psoriasis and IBD, these label expansion opportunities should support sustained growth for both medicines through 2026 and beyond.

ABBV's Competition in the Immunology Space

Johnson & Johnson JNJ remains one of AbbVie's strongest competitors in immunology through blockbuster medicines Tremfya and Stelara. While Stelara faces biosimilar competition, J&J continues to strengthen its position with Tremfya, which is approved across multiple immunology indications, including UC and CD. The company also recently gained FDA approval for Icotyde, a new oral immunology therapy that is positioned as a direct competitor to Skyrizi.

Story Continues

Eli Lilly LLY is also expanding its presence in the immunology space. Its IL-23 inhibitor Omvoh is approved for both UC and CD, broadening Eli Lilly's footprint in the fast-growing IBD market.

ABBV's Price Performance, Valuation and Estimates

Shares of AbbVie have underperformed the industry year to date, as seen in the chart below.Zacks Investment Research

Image Source: Zacks Investment Research

From a valuation standpoint, AbbVie is trading at a discount to the industry. Based on the price/earnings (P/E) ratio, the company's shares currently trade at 14.81 times forward earnings compared with the industry's average of 17.67.Zacks Investment Research

Image Source: Zacks Investment Research

Revisions in EPS estimates for 2026 and 2027 have trended higher over the past 30 days.Zacks Investment Research

Image Source: Zacks Investment Research

AbbVie currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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Investors deciding between Lexicon Pharmaceuticals(NASDAQ:LXRX) and Pfizer(NYSE:PFE) face a choice between an emerging high-growth biotech player and an established global pharmaceutical titan with massive scale.

These two companies operate at opposite ends of the size spectrum, with one focusing on specialized precision medicine while the other manages a vast portfolio of vaccines and therapies. This comparison explores their recent financial health and risk profiles.

The case for Lexicon Pharmaceuticals

Lexicon Pharmaceuticals operates as a contender among biotech stocks by utilizing gene science to develop treatments for chronic conditions. The company primarily focuses on its commercial product, INPEFA, while licensing its programs to partners like Viatris for international markets. Specific customer concentration data was not disclosed in recent filings.

In FY 2025, revenue reached nearly $49.8 million, representing approximately 60% growth over the previous year. Despite this improvement, the company reported a net loss of $50.3 million for the period.

As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 0.6x. This ratio compares total debt to shareholder equity, indicating the extent to which a firm relies on borrowed money.

The case for Pfizer

Pfizer is a global biopharmaceutical leader that discovers, manufactures, and distributes medicines and vaccines across approximately 200 countries. With a workforce of nearly 75,000 employees, the company maintains a dominant presence in both developed and emerging markets. Its scale allows it to manage a massive product pipeline simultaneously, though specific major customers are not disclosed in its filings.

During FY 2025, revenue reached approximately $62.6 billion, representing a slight decrease of nearly 1.6% from the prior year. The company reported net income of roughly $7.8 billion. This level of profitability resulted in a net margin of close to 12.4%.

Based on the December 2025 balance sheet, the debt-to-equity ratio was approximately 0.8x. Free cash flow for the fiscal year was approximately $9.1 billion, providing substantial capital for dividends and research.

Risk profile comparison

Lexicon Pharmaceuticals faces significant regulatory risks, particularly regarding the approval process for candidates such as ZYNQUISTA for type 1 diabetes. The company also carries an accumulated deficit of nearly $2.0 billion, which may necessitate additional capital raises on unfavorable terms. Furthermore, a single entity, Artal Group, holds roughly 35% of the shares, limiting the influence of smaller retail shareholders.

Story Continues

Pfizer faces significant revenue concentration, with 12 products accounting for roughly 65% of its total 2025 revenue. The company faces a period of patent expirations between 2026 and 2030, which could lead to significant competition from generic drug makers. Additionally, government pricing regulations and competition from large peers such as Eli Lilly (NYSE:LLY) and Merck (NYSE:MRK) could affect long-term profitability.

Valuation comparison

While Lexicon Pharmaceuticals lacks a Forward P/E due to its net losses, Pfizer appears much more affordable based on its P/S ratio.

Metric Lexicon Pharmaceuticals Pfizer Sector Benchmark Forward P/E n/a 8.7x 24.9x P/S ratio 16.8x 2.3x

Sector benchmark uses the SPDR XLV sector ETF. Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

Finding a low-priced, development-stage biotech stock that explodes into a long-term 10-bagger on the success of a treatment that eventually reaches market is a dream for investors. Unfortunately, it usually stays that way: a dream that doesn’t become reality. Development-stage pharma companies often fail to get a blockbuster drug to market.

Lexicon Pharmaceuticals is not exactly development stage. It has one product on the market, INPEFA, for a once-a-day tablet for treating heart failure, but it generated just $1.1 million in sales in the first quarter of 2026. Most of the interest around Lexicon is for developmental drugs for chronic pain and cardiometabolic treatments. There are some positives in the trials, but it’s always worth keeping in mind that positive trials can still fail to bring a drug to market due to late regulatory rejections or a developer’s belief that the drug won’t find much market. Lexicon’s low stock price, which has traded between $1 and $2.50 since July 2025, indicates the speculative nature of the business.

Pfizer isn’t a hot growth stock, but it’s also one of the giants of the pharmaceutical industry. The company had a post-COVID letdown of sorts, as pandemic-related demand ebbed, but the business has been flexing its might this year. In its first quarter, Pfizer beat Wall Street analysts’ expectations on sales and net income. That is partly because Pfizer has been buying growth — it recently acquired oncology specialist Seagen and posted 20% growth in that business’s products. Prifzer is also allocating significant resources to new drug development, with 20 drug development starts scheduled for 2026 and eight data readouts expected, which report on the progress of treatments in development. After falling behind in the GLP-1 weight-loss drug market, Pfizer is also making strides toward becoming a competitor, with very positive Phase II (of III) trial results for an injectable GLP-1 reported earlier this year.

With more than $6 billion in cash, a forward price-to-earnings ratio of a bargain basement 8.7, and a tasty yield of 7% based on its recent price of $26, Pfizer is the choice for 2026.

Should you buy stock in Lexicon Pharmaceuticals right now?

Before you buy stock inLexicon Pharmaceuticals, consider this:

The Motley FoolStock Advisoranalyst team just identified what they believe are the 10 best stocksfor investors to buy now… andLexicon Pharmaceuticalswasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years.

Consider whenNetflixmade this list on December 17, 2004... if you invested $1,000 at the time of our recommendation,you’d have $442,220! Or when Nvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you’d have $1,230,114!

That performance is why people listen. With a track record ofbeating the S&P 500 by nearly 5x,Stock Advisoroffers a distinct advantage. Don't miss the latest top 10 list, available withStock Advisor, and join an investing community built for the long haul.

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*Stock Advisor returns as of June 11, 2026.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly, Merck, and Pfizer. The Motley Fool has a disclosure policy.

Lexicon Pharmaceuticals vs. Pfizer: Which Drugmaker Stock Is a Better Buy in 2026? was originally published by The Motley Fool

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Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in Eli Lilly (Symbol: LLY), where a total of 15,976 contracts have traded so far, representing approximately 1.6 million underlying shares. That amounts to about 49.1% of LLY's average daily trading volume over the past month of 3.3 million shares. Particularly high volume was seen for the $1200 strike call option expiring June 12, 2026, with 812 contracts trading so far today, representing approximately 81,200 underlying shares of LLY. Below is a chart showing LLY's trailing twelve month trading history, with the $1200 strike highlighted in orange:

Johnson & Johnson (Symbol: JNJ) saw options trading volume of 37,350 contracts, representing approximately 3.7 million underlying shares or approximately 47.2% of JNJ's average daily trading volume over the past month, of 7.9 million shares. Particularly high volume was seen for the $250 strike call option expiring June 12, 2026, with 13,387 contracts trading so far today, representing approximately 1.3 million underlying shares of JNJ. Below is a chart showing JNJ's trailing twelve month trading history, with the $250 strike highlighted in orange:

And Casey's General Stores, Inc. (Symbol: CASY) saw options trading volume of 2,623 contracts, representing approximately 262,300 underlying shares or approximately 46.5% of CASY's average daily trading volume over the past month, of 563,660 shares. Especially high volume was seen for the $900 strike call option expiring June 18, 2026, with 152 contracts trading so far today, representing approximately 15,200 underlying shares of CASY. Below is a chart showing CASY's trailing twelve month trading history, with the $900 strike highlighted in orange:

For the various different available expirations for LLY options, JNJ options, or CASY options, visit StockOptionsChannel.com.

Today's Most Active Call & Put Options of the S&P 500 »

Further LLY Research:

LLY YTD ReturnLLY Historical Stock PricesYTD Return on Dow

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Quick Read

NVDA's Q1 revenue hit $82B (up 85%), while LLY's Mounjaro drove a nearly $2 EPS beat against analyst estimates. JNJ's 64-year dividend streak and $100B revenue guidance make it the ideal ballast for a portfolio built to compound. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Johnson & Johnson didn't make the cut. Grab the names FREE today.

I keep buying NVIDIA, Eli Lilly, and Johnson & Johnson, and if a fire took my brokerage statement to zero tomorrow, those are the three tickers I would start typing in again on day one. They each do something I cannot replicate by being clever.Arsenii Palivoda / Shutterstock.com

Why the buy button stays active on NVIDIA

NVIDIA (NASDAQ:NVDA) is the one position where I have stopped pretending I can time it. Q1 FY27 revenue came in at $81.61 billion, up 85.23% year over year, with non-GAAP EPS of $1.87 against a $1.7738 estimate. Free cash flow alone was $48.55 billion in a single quarter. Full year FY26 free cash flow reached $96.58 billion. That is the cash machine I am buying.

The capital return shift sealed it for me. The quarterly dividend went from $0.01 to $0.25, a fresh $80 billion buyback authorization landed on top of $38.5 billion remaining, and roughly $20 billion came back to shareholders in Q1.

Jensen Huang framed the cycle plainly: "The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed." Supply commitments of $119 billion tell me management sees the demand the same way I do.

The honest risk is China. The Q2 guide assumes zero Data Center compute revenue from China, and no H20 shipped last quarter. I respect it. I also note that the company is guiding $91 billion for Q2 anyway. The shares are up 12.01% year to date and 47.42% over one year, and the earnings power is growing faster than the multiple.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Johnson & Johnson didn't make the cut. Grab the names FREE today.

Eli Lilly is the franchise I keep underestimating

Eli Lilly (NYSE:LLY) keeps proving me too cautious. Q1 2026 revenue was $19.80 billion, up 55.5% YoY, with EPS of $8.55 against a $6.79 estimate. Mounjaro alone delivered $8.66 billion (125% YoY growth) and Zepbound added $4.16 billion (80% YoY). Full year guidance was raised to $82 to $85 billion in revenue and $35.5 to $37 in non-GAAP EPS.

Foundayo, the first oral GLP-1 that can be taken any time of day without food or water restrictions, is the catalyst I keep coming back to. CEO David Ricks said "Foundayo will meaningfully expand the number of people who can benefit from GLP-1s."

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The honest risk is pricing: realized prices fell 13% in the quarter, with China's NRDL inclusion adding pressure. Volume grew 65%, which is the answer to that risk.

Johnson & Johnson is the ballast

Johnson & Johnson (NYSE:JNJ) is the one I would buy first, because it is the position that lets me sleep. The quarterly dividend was raised 3.1% to $1.34 per share, the 64th consecutive year of increases.

Q1 2026 revenue rose 9.9% YoY to $24.062 billion, adjusted EPS was $2.70, and full year 2026 guidance was lifted to $100.3 to $101.3 billion in revenue and $11.45 to $11.65 in adjusted EPS. DARZALEX grew 22.5%, TREMFYA grew 68.3%, and 2025 free cash flow was $19.7 billion.

The honest risk is STELARA, which fell 59.7% to $656 million on biosimilar erosion. TREMFYA and the oncology stack are absorbing that hit in real time, and the dividend record speaks louder to me than the biosimilar headline.

The forward conviction

Compounding cash flow at NVIDIA, a generational franchise at Lilly, and 64 years of paid dividends at Johnson & Johnson: that is how I would rebuild a portfolio, and that is why my buy button is still warm.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Johnson & Johnson didn't make the cut. Grab the names FREE today.

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In recent years, the pharmaceutical industry has witnessed a remarkable surge in the development of weight loss medications, particularly GLP-1 receptor agonists such as Ozempic and Wegovy. The global obesity rate has nearly tripled since 1975 and is expected to affect over half the population by 2035, per WHO and Goldman Sachs. The global market for anti-obesity medications is expected to reach $50 billion by 2030.

As the prevalence of obesity rises, so do related chronic conditions such as diabetes, heart disease and hypertension, creating a massive market for treatments like GLP-1 drugs. Pioneering GLP-1 treatments, such as Ozempic, Wegovy and Zepbound, are now at the forefront of medical advancements in weight management.

Eli Lilly Hovers Around $1 Trillion Valuation

Eli Lilly LLY shares hit a $1 trillion market value, closing at its first record high since November. The stock has surged more than 25% since the March 30 market low and gained over 400% in the past five years, making Eli Lilly one of Wall Street’s biggest beneficiaries of the obesity-drug boom, per Yahoo Finance. Shares surged about 14% over the past one month (as of June 4, 2026).

Reta Fuels Investor Optimism

Much of the recent excitement centers on retatrutide, or “Reta,” Eli Lilly’s experimental next-generation obesity treatment.

Unlike approved drugs such as Zepbound and Mounjaro, which target two hormone pathways, Reta targets three pathways tied to appetite control, blood sugar regulation and energy use.

In the Phase 3 TRIUMPH-1 obesity trial, patients on the highest dose lost an average of 70.3 pounds, or 28.3% of body weight, over 80 weeks. More than 45% of participants lost at least 30% of their body weight, results often associated with bariatric surgery, per the same Yahoo Finance article.

GLP-1 Market Expands Beyond Obesity

Investors increasingly view GLP-1 drugs as a broader metabolic-health platform extending beyond obesity and diabetes into areas such as sleep apnea, kidney disease, cardiovascular risk, liver disease and addiction treatment.

Alongside Eli Lilly, Novo Nordisk NVO, Amgen AMGN and Viking Therapeutics VKTX remain key players in the obesity-drug race. Meanwhile, Indian pharma major Lupin bets big on India’s GLP-1 market.

The trend is also affecting industries outside healthcare, including packaged food, alcohol, restaurant and retail stocks, as investors assess how appetite-suppressing drugs may reshape consumer behavior.

Deloitte Warns of a GLP-1 “Bubble”

A new report from Deloitte suggests soaring demand for obesity and diabetes drugs may be creating a “bubble effect” within the pharmaceutical industry, as quoted on CNBC.

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Returns on pharmaceutical R&D among the world’s top 20 drugmakers rose to 7% in 2025, driven largely by GLP-1-related assets. Obesity treatments now account for roughly 25% of projected late-stage pipeline sales, surpassing oncology for the first time in 16 years.

According to Deloitte, GLP-1 and obesity drugs now represent about 38% of projected commercial inflows from the 2025 late-stage pipeline. Excluding these drugs, the industry’s R&D return falls sharply to 2.9%.

The report also highlighted concentration risk, noting that only 9% of blockbuster late-stage therapies is expected to generate nearly 70% of total risk-adjusted peak sales.

AI and Health Tech Join the GLP-1 Boom

The obesity-drug trend is also driving growth in health technology. Health-tech startup Signos recently raised $20 million in funding and expanded its partnership with Dexcom, per a CNBC article.

Signos uses AI-powered glucose monitoring technology alongside Dexcom’s continuous glucose monitors to help users manage weight through personalized recommendations tied to food, sleep, stress and lifestyle habits.

ETFs to Play

Roundhill GLP-1 and Weight Loss ETF OZEM, Tema Heart & Health ETF HRTS and Amplify Weight Loss Drug & Treatment ETF THNR are some of the ETFs that should be closely tracked in light of the above-mentioned scenario.

LLY-heavy ETFs like the iShares U.S. Pharmaceuticals ETF IHE, Harbor Health Care ETF MEDI and VanEck Pharmaceutical ETF PPH should also benefit from this trend.

NVO-heavy ETFs such as the Simplify Health Care ETF PINK and PPH are also in focus. Meanwhile, Amgen-heavy ETFs like the VanEck Biotech ETF BBH and iShares Biotechnology ETF IBB should not be overlooked amid this euphoria.

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Novo Nordisk A/S (NVO) : Free Stock Analysis Report

Eli Lilly and Company (LLY) : Free Stock Analysis Report

Amgen Inc. (AMGN) : Free Stock Analysis Report

iShares Biotechnology ETF (IBB): ETF Research Reports

Viking Therapeutics, Inc. (VKTX) : Free Stock Analysis Report

iShares U.S. Pharmaceuticals ETF (IHE): ETF Research Reports

VanEck Pharmaceutical ETF (PPH): ETF Research Reports

VanEck Biotech ETF (BBH): ETF Research Reports

Simplify Health Care ETF (PINK): ETF Research Reports

Tema Heart & Health ETF (HRTS): ETF Research Reports

Amplify Weight Loss Drug & Treatment ETF (THNR): ETF Research Reports

Roundhill GLP-1 & Weight Loss ETF (OZEM): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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