The two biggest stocks on the market have grown even bigger so far this year. Apple (AAPL -0.35%) shares have soared close to 40%, while Microsoft (MSFT 1.82%) stock is up around 23%.
Investors' excitement about artificial intelligence (AI) has helped boost many tech stocks. However, you can find big winners outside of tech, too. This stock-split stock is beating both Apple and Microsoft -- with no AI tailwind at all.
Who needs AI when you've got Ozempic and Wegovy?
Sometimes, stock splits serve as key catalysts for stocks. That wasn't the case for Novo Nordisk (NVO 0.84%), though.
The big pharma stock jumped more than 40% year to date before Novo Nordisk's two-for-one stock split conducted on Sept. 20, 2023. Novo's shares declined a bit after the split before bouncing back.
Apple and Microsoft were easily outperforming Novo Nordisk throughout much of 2023. Things changed, however, after Novo Nordisk announced positive results on Aug. 8 for semaglutide in reducing the risk of major cardiovascular events in overweight or obese adults.
Two days later, Novo Nordisk reported its financial results for the first half of the year. Semaglutide was the big star.
The drug is marketed as Ozempic as a treatment for type 2 diabetes and as Wegovy in treating weight loss. Ozempic's sales soared 58% year over year in the first half of 2023, while Wegovy's sales skyrocketed 367%.
Even brighter days ahead for Novo Nordisk
It's likely that even brighter days lie ahead for Novo Nordisk. The company raised its full-year 2023 sales growth forecast by 5%, thanks to greater expectations for Ozempic and Wegovy.
Novo Nordisk's outlook could get even better. Earlier this month, the big drugmaker announced that it was stopping a kidney outcomes trial of semaglutide.
Halting a clinical study doesn't always mean good news, but it did this time. An interim analysis found that semaglutide was so effective in slowing the progression of renal impairment in patients with type 2 diabetes and chronic kidney disease that the trial didn't need to continue.
The success of Ozempic and Wegovy has given Novo Nordisk plenty of cash to fund the expansion of its pipeline. Over the last couple of months, the company has announced the acquisition of Inversago Pharma and the purchase of experimental hypertension drug ocedurenone from KBP Biosciences.
Although AI hasn't provided a tailwind for Novo Nordisk, it could play a more important role for the company in the future. In September, Novo announced that it would collaborate with Valo Health to use AI in drug discovery. The big drugmaker also licensed three preclinical drug discovery programs targeting cardiovascular diseases that Valo developed using its AI-powered Opal Computational Platform.
Is Novo Nordisk stock a buy now?
Wall Street analysts think that Novo Nordisk stock can go even higher. The consensus 12-month price target reflects an upside potential of more than 20%. However, I don't think Novo Nordisk stock is the best pick for investors right now.
For one thing, the stock's valuation is high. Shares currently trade at a forward earnings multiple of over 34.7x. Clearly, a lot of growth is already baked into the price of this pharma stock. I also expect that Eli Lilly's Mounjaro will vault past Ozempic and Wegovy if it wins U.S. approval as a weight-loss treatment.
While Novo Nordisk stock is beating Apple and Microsoft in 2023, its performance lagged well behind both tech stocks over the last 10 years. I suspect that history will repeat itself. In my view, AI is likely to provide a more durable long-term tailwind than Ozempic and Wegovy will.
