Eli Lilly Nears $1 Trillion! Time to Shift to Value Stocks During Sector Rotation?
On Wednesday, $Eli Lilly(LLY)$ jumped 2.95% to close at $1,017.78 per share, hitting another record high and bringing its market capitalization close to the $1 trillion mark. Founded 147 years ago, this pharmaceutical giant is now writing a new chapter in wealth creation at an astonishing pace.
A quiet shift in market style is underway
The Dow Jones Industrial Average, representing traditional economy stocks, has been setting new highs, while tech-heavy growth sectors are showing signs of fatigue. Analysts attribute this rotation to growing concerns over an AI bubble and renewed appreciation for value stocks. This transition from “pure growth” to “pure value” began in August and is now accelerating.
The U.S. stock market is witnessing a clear style rotation. As “the young guns” — the long-dominant tech leaders — start to lose steam, “the old guard” — traditional blue chips — are taking the lead and setting fresh records.
On Tuesday, the divergence between sectors became the market’s defining feature: $Dow Jones(.DJI)$ surged strongly, marking its 16th record close of the year, while $NASDAQ(.IXIC)$ dominated by tech names, slipped into the red.
Healthcare shines: Why did LLY hit new highs?
Last Thursday, Trump announced a deal with Eli Lilly and Novo Nordisk to sharply cut prices on certain weight-loss drugs, including upcoming oral versions.
Under the agreement disclosed Thursday, starting in 2026, Medicare and Medicaid patients will be able to obtain Eli Lilly’s Zepbound and Novo Nordisk’s Wegovy at a list price of $245 per month, with Medicare copays capped at $50.
$Goldman Sachs(GS)$ remains decisively bullish on Eli Lilly, citing several reasons:
Lilly’s Zepbound dominates both the reimbursement channel (60% vs. Wegovy’s 40%) and the cash-pay channel (85% vs. Wegovy’s 15%), positioning it to capture more upside from volume growth.
More importantly, Lilly received a Priority Review Voucher, allowing its oral GLP-1 drug, orforglipron, to potentially launch in Q1 2026 — earlier than previously expected (Q2–Q3).
Goldman estimates this could add at least $1 billion in incremental revenue for Lilly in 2026.
Beyond LLY — UNH and NVO also worth watching
In contrast, $Novo-Nordisk A/S(NVO)$ faces a tougher road ahead. Goldman noted that the company’s press release projected a “low single-digit” revenue impact in 2026 from the new pricing — an additional headwind on top of existing challenges.
The firm highlighted several obstacles: a 2-percentage-point drag from 2025 GTN impacts, low single-digit pressure from semaglutide generics abroad, and potential loss of Medicaid coverage in some U.S. states.
$UnitedHealth(UNH)$ also joined the healthcare rebound.
Shares surged 5.8% over two days as Reddit investor sentiment flipped from deeply bearish to bullish. Premiums at UnitedHealth rose 20–30% this year, while the core UnitedHealthcare segment posted 16% year-over-year revenue growth. Management raised 2025 adjusted EPS guidance to at least $16.25 and signaled accelerating growth into 2026.
With Eli Lilly breaking new highs, is Novo Nordisk now undervalued?
Do you believe UNH’s rebound has more room to run?
Besides healthcare, which other value stocks are climbing lately?
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I get it, if you want to track a meme stock, by all means, look at Reddit because that would literally be a finger on the pulse.
In the medium term, I think Novo Nordisk can still go up, but I wonder if GLP1 will start losing steam, what with China catching up to that trend and likely to produce viable alternatives that will be cheaper.
I think UNH will similarly need the us government to prop them up to continue the ascend, otherwise it will likely lose steam.
AI is always climbing, anything and everything wants to be called AI to bask in the glory and cash in on the lucrative investments.
Novo Nordisk $Novo-Nordisk A/S(NVO)$ , meanwhile, looks like a potential rebound play. With expectations reset after pricing pressure and cautious guidance, any stabilization in margins or faster oral semaglutide rollout could spark a recovery. I’d consider adding on dips.
UnitedHealth’s $UnitedHealth(UNH)$ bounce also stands out — strong premium growth and raised EPS guidance show resilience. I think it still has upside, especially as investors rotate toward reliable earnings. Beyond healthcare, industrials and consumer staples are quietly gaining strength too.
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Riding the wave of Zepbound & Mounjaro, Lilly has become the darling of Wall Street. Its stock price pierced through the USD 1000 mark, buoyed by Trump era drug pricing deals. Investors see Lilly as politically aligned, commercially aggressive and structurally advantaged.
Novo Nordisk's stock has plunged over 40%, punished by pricing fears and slower US uptake.
Yet it remains profitable and more global intake. Ozempic, Wegovy have become global bestsellers. Wegovy recently gained FDA approval for reducing cardiovascular risk, expanding it's utility beyond weight loss.
I believe Novo Nordisk is undervalued compared to Lilly. Its fundamentals remain strong. Its recent stock decline may present a buying opportunity.
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根據週四披露的協議，從2026年開始，醫療保險和醫療補助患者將能夠以每月245美元的標價獲得禮來公司的Zepbound和諾和諾德的Wegovy，醫療保險共付額上限爲50美元。
If Eli Lilly is approaching its peak and its valuation has become stretched, it may be a good time to consider rotating into value stocks in other sectors
Novo Nordisk A/S (NVO) could be undervalued for those who believe in its strong potential in diabetes and obesity treatments, offering good upside at a more attractive price
UnitedHealth Group (UNH) likely still has room to run in the long term, especially if healthcare trends continue to favor large providers during uncertain economic times
Additionally, the energy, financials, consumer staples, and industrials sectors are showing strong value opportunities, with Exxon Mobil (XOM), JPMorgan Chase (JPM), Procter & Gamble (PG) and Caterpillar (CAT) standing out as top choices for those looking to diversify away from healthcare
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$Lockheed Martin(LMT)$ in the defense sector. It is benefiting from increased US military spending and NATO contracts.
$Exxon Mobil(XOM)$ is riding the energy boom. Exxon has a great dividend yield of 3.5% and is well positioned for long term value as oil demand stabilises.
$JPMorgan Chase(JPM)$ is benefiting from higher interest rates and strong loan growth. It trades at a modest P/E ratio of 10 to 12 with consistent dividend increases. JPMorgan is seen as a fortress bank with diversified revenue streams.
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It is interesting to note that big institutions like Warren Buffett, David Tepper and Michael Burry have increased their stakes in UNH in 2025, citing undervaluation and durable cash flows.
UNH trades at a Forward P/E ratio of 12 to 14.6, well below its historical average of 20.1.
I believe that UNH has greater upside potential even though its share price has rebounded recently. It also has a dividend yield of 2.7%, which is a great source of passive income for income seeking investors while waiting for capital growth.
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Check them in the history - “community distribution“
UNH has pulled back already. However, I believe the new leadership can turn things around. It is a major player for insurance in the US and trump looks set to introduce his own ways of keeping healthcare costs affordable for the Americans though not the same strategy as Obamacare. I expect premiums to pour in as Americans depend on it to keep their healthcare costs more affordable and so I expect another rebound next year especially if recession happens.
Recently coka cola has done well too and is almost a sure win dividend stock.