Investing in This Healthcare Stock Could Be Like Catching Nvidia at the Dawn of the AI Boom

Nov. 30, 2022, will go down as a defining moment in modern history. That's the day OpenAI released ChatGPT to the masses. Just like that, euphoria about artificial intelligence (AI) took over the world.

One of the biggest beneficiaries of the AI boom has been semiconductor specialist Nvidia. If you had bought shares of Nvidia on the same day that ChatGPT was introduced, you would be up 583% right now. Some investors might think that returns of this magnitude are rare. I disagree. Stocks move up for all sorts of reasons, even the most unconventional ones.

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

Recently, I watched an interview with Roundhill Investments CEO Dave Mazza in which he referred to pharmaceutical leader Eli Lilly (NYSE: LLY) as the "Nvidia of the GLP-1 and weight loss space." I love this analogy, and I agree with his take. Below, I break down several reasons why investing in Eli Lilly right now could be similar to doing so with Nvidia during the dawn of the AI revolution.

The rise of weight loss medications

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

What's more, the company's own CEO, David Ricks, said the company hasn't even scratched the surface of its marketing and promotional efforts for its GLP-1 lineup. With that in mind, it's fair to think that Mounjaro and Zepbound have even better days ahead.

On top of that, Lilly continues to work hard to diversify beyond its injection-based weight loss treatments. The company's oral solution, orforglipron, is currently in phase 3 clinical trials.

Lastly, GLP-1 medicines are likely to witness more proliferation in the long run. Novo Nordisk's Wegovy was recently granted an expanded indication from the Food and Drug Administration (FDA) to treat cardiovascular disease in obesity patients. And Lilly has been exploring uses for treating obstructive sleep apnea.

So much more to offer

Nvidia is best known for its chips called graphics processing units (GPUs). The company also has a large software business called CUDA that rarely gets spoken about. In a similar fashion, there is a lot more to Eli Lilly than its blockbuster GLP-1 drugs.