Eli Lilly's market value surpasses Tesla: "Weight loss pills" exceed "Musk"?

"The miracle weight-loss drug" has replaced electric vehicles as one of the hottest stocks on the US market in 2024.

In overnight trading, Tesla plummeted 12%, marking its biggest drop in a year. Its market value evaporated by $80 billion in a single day, falling slightly above $570 billion, allowing pharmaceutical giant Eli Lilly, with a market value of $596 billion, to surpass it.

Benefiting from the success of its two GLP-1 weight-loss drugs, Mounjaro and Zepbound, Eli Lilly's stock price soared by 59% last year and has risen by 7.7% this year, making it the world's largest healthcare company.

In addition, Novo Nordisk AS, which holds similar "miracle weight-loss drugs" such as Wegovy and Ozempic, has also seen its stock price skyrocket, making it the largest listed company in Europe by market value.

Eli Lilly surpassed Tesla in market value for the first time last year, and now it has once again overtaken Tesla, indicating that investor confidence is shifting from electric vehicles to weight-loss drugs.

Steve Sosnick, Chief Strategist at Interactive Brokers, said, "The market tends to favor big, broad trends, and one of those trends has been electric vehicles and all of Tesla's products." "But currently, the trend that is really attracting investors is artificial intelligence and GLP-1 weight-loss drugs."

Analysts predict that the sales growth of GLP-1 weight-loss drugs will continue to drive the stock prices of these two giants higher.

Goldman Sachs analyst Mark Delaney stated that slowing car deliveries and profit growth pose a threat to Tesla's stock. Since January, Tesla's stock price has fallen by more than a quarter, making it the only declining stock among the "Big Seven" tech stocks in 2024.

Tesla's Q4 2023 profit plummeted by 40%, marking its first annual profit decline since 2017. The company also warned of a decline in car sales in 2024, but did not provide specific figures as it did in its Q4 earnings report. Disappointing performance and vague guidance have greatly disappointed the market. During a conference call, Musk claimed that Tesla is "between two major waves of growth." The growth brought by Model 3 and Model Y has reached its limit, and the next wave of growth will be triggered by the global expansion of the next generation of vehicles.

As for when the next wave will come, Musk stated that the next generation of vehicles will be launched in the second half of next year, while admitting that "I am usually optimistic about timing."

This means that there may be some delays in the launch of the new car.

Analysts predict that this could result in a slowdown in Tesla's performance for at least the next two years. There was once anticipation that the Cybertruck electric pickup, which started deliveries at the end of last year, could alleviate the slowdown in Tesla's performance, but now these expectations are being lowered.