Is GLP-1 the new AI? Drugmaker Eli Lilly joins the $1 trillion market-cap club.

By Jaimy Lee

The milestone is the result of the drugmaker's calculated strategy to dominate the market for obesity medications

Eli Lilly on Friday crossed the $1 trillion market-cap threshold - the first drugmaker to ever reach that milestone.

Eli Lilly & Co. is the first pharmaceutical stock to hit a $1 trillion valuation, with its stock's rise driven by a methodical approach to capturing an obesity-drug market that didn't exist five years ago.

The Indianapolis drug giant's stock (LLY) reached an intraday high of $1,061.17 in morning trading and closed at $1,059.70 on Friday, which was above the threshold of $1,057.78 needed for Lilly to become the 10th U.S. company with a $1 trillion market capitalization. It's the only healthcare company to have made the cut to date.

The only other nontechnology member of the club is Warren Buffett's Berkshire Hathaway Inc. (BRK.A) (BRK.B), which currently sits in ninth place. One could argue, however, that two of the tech companies in the club - Nvidia Corp. (NVDA) and Amazon.com Inc. (AMZN) - are increasingly being recognized for their work in drug development and medical services, respectively.

Lilly's rise is one to study. The drugmaker has long been one of the top pharmaceutical players, bringing Prozac to the masses in the 1990s as well as the insulin Humulin a decade earlier. Five years ago, its stock was trading at about $145.

But then came tirzepatide, the active ingredient in Mounjaro and Zepbound that dramatically changed the company's fortunes. The Food and Drug Administration approved Mounjaro in 2022 for Type 2 diabetes and Zepbound for obesity the following year. At that time, Novo Nordisk (NVO) (DK:NOVO.B), which has a competing GLP-1 duo for the same conditions, was far ahead of Lilly.

That dynamic has since reversed. While Lilly's stock hit record highs during most of November, Novo's shares have tumbled 68% since their record close at $146.91 on June 25, 2024.

Read: Why cutting drug prices is pushing Eli Lilly's stock to all-time highs

That's because Lilly's approach to deals of all kinds - including acquisitions, licensing, telehealth, manufacturing and agreements with the Trump administration - have set it apart from Novo, which is now undergoing a major restructuring under a new chief executive. By Aug. 8, 2023, Lilly's stock had hit $521.60 after a record quarter for Mounjaro and new data for Novo's Wegovy that showed GLP-1s can also produce a slew of cardiovascular benefits in addition to weight loss.

Since then, Lilly's market cap has doubled, as shown in the table below:

   Market-cap milestone  Date 
   $50 billion           Feb. 12, 1997 
   $100 billion          Jan. 28, 1999 
   $200 billion          Jan. 25, 2021 
   $300 billion          June 24, 2022 
   $400 billion          May 3, 2023 
   $500 billion          Aug. 11, 2023 
   $600 billion          Jan. 11, 2024 
   $700 billion          Feb. 9, 2024 
   $800 billion          June 7, 2024 
   $900 billion          July 12, 2024 
   $1 trillion           Nov. 21, 2025 
   Source: FactSet 

Lilly is winning with its diverse pipeline of novel drugs, promising tirzepatide combinations and an obesity pill in development, in addition to its work on conditions like wet age-related macular degeneration and Alzheimer's disease, for which it is selling a new treatment called Kisunla.

Its stock is up 37% so far this year, and there could be more gains to come. The FDA is expected to decide in the first quarter of next year whether to approve orforglipron, Lilly's experimental GLP-1 pill that could be the first oral GLP-1 medicine for obesity. Jefferies analysts predict that orforglipron could eventually bring in $25 billion in annual sales.

-Jaimy Lee

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11-21-25 1720ET