Shares of Novo Nordisk and Eli Lilly have surged on strong demand for their diabetes and obesity medications like Ozempic, Wegovy, and Mounjaro. Investors are betting on years of blockbuster sales and profits from the obesity epidemic. The drugs are forecast to reach $53 billion in combined revenue by 2028. Enthusiasm for weight-loss drugs has outweighed challenges facing the broader pharmaceutical industry like fading COVID-19 sales, drug pricing reforms, and patent expirations. Some investors see beaten-down pharma stocks like Pfizer as undervalued given their technology and potential, while weight-loss stocks are priced for perfection, leaving little room for disappointment.

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