Eli Lilly (LLY -0.29%) and Meta Platforms (META -2.35%) don't seem to have much in common as they operate entirely different businesses in completely different industries. The former is a leader in the biotech industry, while the latter is a social media specialist. Here is another difference between the two: Meta Platforms once managed to achieve a feat that Eli Lilly hasn't, and that sometimes makes it a benchmark in the eyes of many investors. Back in 2021, the technology giant became a trillion-dollar company.
While Meta no longer holds that title, with a market capitalization of $962 billion, it should soon rejoin this exclusive clique. Eli Lilly is more than halfway through this goal, with a current market cap of about $610 billion. The drugmaker has generated much stronger returns than Meta Platforms in the past decade, and if the trend continues, Eli Lilly could overtake Meta Platforms soon enough. Could that happen by 2030? Let's find out.
Eli Lilly will benefit from major tailwinds
Notice that Meta Platforms was outpacing Eli Lilly for much of the past decade until about 2022 when the latter skyrocketed. What happened then? Meta Platforms' stock soared during the early months of the pandemic but subsequently fell as that tailwind ended. Meanwhile, Eli Lilly has been on a roll since 2022 with significant clinical and regulatory developments that should help drive strong financial results through the end of the decade and beyond.
Most notably, Eli Lilly earned approval for an innovative diabetes medicine called Mounjaro in 2022. Last year, it earned a key label expansion in targeting obesity with the drug marketed as Zepbound. Some analysts have predicted peak annual sales of $25 billion for this compound, which would be amazing. Even Humira, the best-selling drug in the history of the industry, peaked at $21.2 billion in yearly sales.
Mounjaro is just one piece of the puzzle for Eli Lilly, although it's a hugely important one. The company is adding several other important medicines to its lineup that should also be successful. For instance, the company's new ulcerative colitis medicine Omvoh could generate sales of $1.2 billion by 2029, while Jaypirca, a new cancer drug, could hit more than $2.5 billion by 2030.
Then there is donanemab, a potential Alzheimer's disease therapy. Eli Lilly is waiting for approval for this product, and if it does earn the green light, the research company Evaluate Pharma thinks it could rack up $2.1 billion in sales by 2028. There are other key products in Eli Lilly's late-stage pipeline, including a potential once-weekly insulin option. Furthermore, the company's existing lineup features medicines whose sales are still growing at a good clip, from cancer drug Verzenio to immunosuppressant Taltz.
Unless something catastrophic happens, Eli Lilly should outperform the market through 2030, especially as analysts see the company's earnings per share growing by an average of 28.7% for the next five years -- an almost outrageous pace for a biotech giant.
Meta Platforms has strong prospects too
Meta Platforms was able to bounce back in 2023. The company benefited from a recovering advertising market while it continued to ramp up monetization of newer initiates across its portfolio of websites and apps. On WhatsApp, the company is working on paid messaging, while its short-form videos on Facebook and Instagram are helping keep users glued to their screens and attracting advertisers. These are important long-term opportunities. Furthermore, the tech company is also looking to make a splash in artificial intelligence.
In my view, Meta Platforms is also well-positioned to outperform the market through 2030, although it will be more susceptible than Eli Lilly to several risks, including economic challenges, as we saw in much of 2021 and 2022.
Two trillion-dollar stocks in the making
At its current valuation, Eli Lilly will need a compound annual growth rate of about 8.6% to become a trillion-dollar stock in six years. That shouldn't be a problem for the company. Far from it. However, Meta Platforms will almost certainly rejoin this rank much sooner. While Eli Lilly will, in my view, outperform Meta Platforms through 2030, whether it can do so enough to end up with a larger market cap is another question. That seems somewhat unlikely, at least to me.
Meta Platforms' poor performance in 2021 and 2022, which allowed Eli Lilly to soar past it, won't become a habit moving forward, nor should investors expect the biotech giant to deliver the kinds of returns it did during these past two years regularly. Still, Eli Lilly remains a solid buy, as does Meta Platforms.
