The Danish pharmaceutical giant Novo Nordisk (NVO -0.86%) is making waves globally thanks to hotter-than-hot sales of its medicine called semaglutide, which, if the hype is to be believed, is rapidly shaping up to be a wonder drug for both diabetes and weight loss.

But does that make the stock worth buying today, or does it mean that it's too hot to touch? Let's figure it out.

"Semaglutide" is the only word that matters

Novo Nordisk has a bunch of different medicines on the market, but the most important one for investors to know about is semaglutide. It's currently being marketed via three brands in the U.S. and the E.U.: Ozempic, Rybelsus, and Wegovy. Wegovy was first approved in mid-2021, and it's indicated specifically to treat obesity, whereas the other two are indicated to treat diabetes. The Food and Drug Administration (FDA) estimated that around 70% of adults in the U.S. are either obese or overweight. So it seems likely that all three medicines will rake in billions of dollars for the company over the coming years.

According to Fortune Business Insights, the market for anti-obesity therapies will expand to reach $13.2 billion by 2029, at a compound annual growth rate (CAGR) of 24.7%. For reference, Novo Nordisk's total revenue was more than $25 billion in 2022, up 29% from three years prior. In the same period, its diluted earnings per share (EPS) climbed by 25.5%, and Wall Street analysts anticipate on average that it'll rise from 2022's $3.46 per share to reach $6.40 per share in the 2024 fiscal year, indicating that the pharma's pace of growth is about to pick up substantially.

Novo Nordisk isn't done developing semaglutide, either. It's currently running a phase 3 clinical trial investigating whether the drug could be useful in treating Alzheimer's disease and nonalcoholic steatohepatitis (NASH); it also has other phase 3 trials testing a few additional indications for diabetes and obesity. And that's not counting the myriad of other programs in its pipeline, at least some of which will make it to the market over the next few years.

The tailwinds from semaglutide are likely to continue to drive Novo Nordisk's share price higher for at least the next few years. That makes it a compelling buy now before its shares appreciate in value even more.

You'll pay for the privilege of holding this stock

While its growth runway keeps expanding, as an investment Novo Nordisk stock does have a major drawback: its valuation.

The stock's trailing price-to-earnings (P/E) multiple is above 44, making it vastly more pricey than the pharma industry's average P/E of 19. In other words, this company can reasonably be expected to grow by a huge amount, and the market is pricing the stock to account for much of that growth before it even happens. Expectations for the future are high, which is also a risk, given the high valuation.

Until there's meaningful softening of its earnings as conveyed in its quarterly reports -- which isn't likely to happen soon, assuming it ever does -- it isn't reasonable to expect this stock's price to drop significantly without an external catalyst.

At the same time, hype levels about Novo Nordisk and semaglutide are on the uptick, which also means there's a risk of buying shares at an overinflated level only to see the stock drop as investors lose interest over the following months. Likewise, the risk of semaglutide falling from grace is a significant one that's exaggerated by the valuation; bad news about the drug's drawbacks could be devastating for shareholders.

So investors either need to accept the hype- and valuation-driven risks of the shares dropping, or sit on the sidelines and potentially see the stock soar. That should discourage especially conservative and value-sensitive investors from approaching Novo Nordisk at the moment, even though its long-term prospects look quite sunny.

But for everyone else, assuming you're willing to hold onto the stock for at least five years to compensate for the near-term valuation risk, now's a good time to buy. And if you're looking for a medium- to low-risk investment for the portion of your portfolio devoted to blue chip stocks, that's especially true.