Will Novo Nordisk Be Worth More Than Meta Platforms by 2030?

Key Points

Demand for Novo Nordisk's weight-loss products has become so significant that the company is investing billions into building more capacity.

Meta Platforms has been one of the best-performing stocks this year, but it could face challenges.

Motley Fool Issues Rare “All In” Buy Alert

The gap in market cap between these two companies is big today, but it could shrink in the future.

Novo Nordisk (NVO 0.84%) is one of the top healthcare companies in the world. It has become a big name thanks to its diabetes and weight-loss products.

Two promising assets it has are Ozempic (for diabetes) and Wegovy (weight loss), which have been highly effective in helping people lose weight. With strong growth opportunities thanks to these drugs, investors have been bullish on its prospects. So far this year, shares of Novo Nordisk rose by more than 45%.

At approximately $450 billion, the healthcare company's market cap is large, but it's not nearly the size of the big tech stocks. Meta Platforms (META 0.43%), which owns Facebook and WhatsApp, is worth $900 billion -- double Novo Nordisk's valuation. It has been an even hotter buy this year, rising 190% in value.

While there is a large spread in the market cap between these two businesses, that could shrink in the years ahead.

Why Novo Nordisk will get bigger

Novo Nordisk still has many promising growth opportunities. Demand for its products is so significant that the company has limited the rollout of Wegovy in new markets. The company is planning to invest $6 billion into new production facilities in Denmark, which will come online between 2025 and 2029.

That's the biggest hurdle right now: getting Wegovy out to as many people who want it. The demand is there, and the company just needs to make enough of it. For the three months ending Sept. 30, Wegovy's sales totaled more than 9.6 billion Danish krone ($1.4 billion) and rose by 734% year over year.

Novo Nordisk is also working on an oral version of Wegovy (which is now only an injectable), and in clinical trials, it has been showing that its results are comparable: The pill version helped people lose an average of 15.1% of their body weight.

That's in phase 3a trials, which are fairly far along in the process. The drug could be on the market soon, and it could be yet another growth catalyst for the business.

Given the strong potential for Novo Nordisk, it wouldn't be surprising for the healthcare stock to continue to be a hot buy with investors and for it to rise even further.

Why Meta Platforms could fall in value

Meta Platforms stock has performed exceptionally well this year, but I'd argue that it has become too hot; it doesn't warrant being at such a high valuation. It was not that long ago investors were raising questions about the company's prospects, particularly as TikTok emerged on the scene and was proving popular with young people. And that problem hasn't gone away.

According to a survey from the Pew Research Center, U.S. teens still prefer to use TikTok and other platforms. Just 33% of Americans between 13 and 17 said they used Facebook. And while that percentage climbed to 59% for Instagram, it was below TikTok (63%), and even Snapchat (60%) was more popular. Alphabet's YouTube was far and away the most popular, with 93% of teens saying they use it.

It's a concerning trend for Meta because if its apps are falling out of favor with younger audiences, that means that as they get older, they will have become accustomed to other platforms, and that can have a ripple effect on the company's prospects.

Another problem is that Meta has been investing billions into the metaverse. Its Reality Labs division, which sells virtual reality headsets, has incurred operating losses of $11.5 billion over the past nine months.

For now, revenue related to Facebook and Meta's other apps is making up for those losses as the company's Family of Apps segment reported operating profits of $41.8 billion over that same stretch. But that's not sustainable, and if there are any hiccups, Meta's earnings could struggle.

While Meta Platforms is at a market cap of $900 billion, I would expect that to come down since the stock has generated oversize gains this year. Right now, things are going good for the business despite Reality Labs' losses, but that could change, and when it does, the stock could go right back into a free fall.

Investors shouldn't forget that in 2022, shares of Meta nose-dived by 64% as people couldn't dump the stock fast enough. This is proving to be a volatile investment, and while the valuation is up this year, that trend might not continue.