Investing in this healthcare stock could be like catching Nvidia at the dawn of the AI ​​boom

November 30, 2022 will remain a defining moment in modern history. This is the day OpenAI released ChatGPT to the masses. Likewise, artificial intelligence (AI) euphoria has taken over the world.

One of the biggest beneficiaries of the AI ​​boom has been the semiconductor specialist Nvidia. If you had bought Nvidia stock the same day ChatGPT was introduced, you’d be up 583% right now. Some investors might think that returns of this magnitude are rare. I don’t agree. Stocks rise for all kinds of reasons, even the most unconventional.

What is rare, however, is finding a quality company with legitimate catalysts that can fuel long-term growth. Outside of AI, another growing stock market narrative surrounds the rise of glucagon-like peptide-1 (GLP-1) agonists to treat diabetes and obesity, such as Ozempic and Mounjaro.

I recently watched an interview with Roundhill Investments CEO Dave Mazza in which he referred to the pharmaceutical leader. Eli Lilly (LLY 0.70%) as the “Nvidia of the GLP-1 and weight loss space.” I like this analogy and agree with his interpretation. Below, I detail some reasons why investing in Eli Lilly right now could be similar to doing so with Nvidia at the dawn of the AI ​​revolution.

The rise of weight loss drugs

GLP-1 agonists have become popular among patients with diabetes and obesity. Today, Lilly has two leading GLP-1 drugs, Mounjaro and Zepbound. These treatments are sending shockwaves through the pharmaceutical sector and have propelled a new phase of growth for Lilly.

Furthermore, the company’s CEO, David Ricks, said that the company has not even scratched the surface of its marketing and promotion efforts for its GLP-1 range. With that in mind, it’s fair to believe that Mounjaro and Zepbound have even better days ahead.

Additionally, Lilly continues to work hard to diversify beyond injectable weight loss treatments. The company’s oral solution, orforglipron, is currently in phase 3 clinical trials.

Finally, GLP-1 drugs are likely to witness greater proliferation in the long term. Novo NordiskWegovy recently received an expanded indication from the Food and Drug Administration (FDA) to treat cardiovascular disease in obese patients. And Lilly has explored uses for treating obstructive sleep apnea.

Image source: Getty Images.

So much more to offer

Nvidia is known for its chips called graphics processing units (GPUs). The company also has a large software business called CUDA, which is rarely talked about. Similarly, there is much more to Eli Lilly than its blockbuster GLP-1 drugs.

One of the other successful drugs is a cyclin-dependent kinase (CDK) inhibitor called Verzenio. It received FDA approval in 2017 and just last year received an expanded indication for use among certain cancer patients. This expanded Verzenio’s addressable market and triggered a new phase of accelerated growth for the drug.

Beyond its core portfolio, Lilly is set to enter another area of ​​healthcare. In July, the company received FDA approval for its Alzheimer’s disease candidate, donanemab. Similar to the GLP-1 market, treating Alzheimer’s disease has enormous potential. However, there is limited competition out there today biogenichis and Come onto Leqembi.

In addition to its existing opportunities and pipeline of new drugs, Lilly is also at the forefront of technological innovation in healthcare.

Earlier this year, it partnered with OpenAI. The goal is to bring generative AI capabilities to the healthcare space in an effort to discover innovative treatments for sophisticated (and perhaps neglected) diseases.

An unstoppable force in the long run

I see a lot of overlap between Nvidia and Lilly. Both companies are the biggest names in their respective industries and each has a proven track record of developing the best quality products and services.

Similar to the AI ​​narrative, I believe the GLP-1 story is just beginning. To me, new chapters are likely to include growing applications for these drugs, which further increases Lilly’s market potential. When you add in the company’s foray into Alzheimer’s and the long-term prospects AI holds for healthcare, it’s hard to overstate all the growth catalysts Lilly is leveraging.

I see it as a generational opportunity and one that will continue to yield significant gains for patient investors. I think now is a great time to buy shares of Eli Lilly and hold on for the long term.