Portfolio in Brief—Eli Lilly (LLY)
Eli Lilly is now one of the most important players in the global pharmaceutical industry. Based in Indianapolis, the company is best known for its treatments in diabetes, obesity, oncology, immunology and neurodegenerative diseases.
The stock has just reached a major milestone: Eli Lilly became the first pharmaceutical company to reach a market capitalization of US$1 trillion. Shares also moved to new highs, above US$1,000, after gaining more than 15% over the past month. This move places Lilly in a very select group of companies valued above US$1 trillion, alongside giants such as Apple, Microsoft, Nvidia and Amazon.
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Recent Highlights
The main driver behind this move remains the strong demand for Mounjaro and Zepbound, Lilly’s two flagship treatments in diabetes and obesity. These drugs are part of the GLP-1 category, a market that several analysts believe could eventually exceed US$150 billion in annual global revenue.
Lilly has a particularly strong position through its tirzepatide-based treatments, which target both GLP-1 and GIP hormones. This dual-action mechanism is seen as an important competitive advantage, as it may deliver stronger weight-loss results than some competing therapies.
The financial results also support the investment thesis. In its most recent quarter, the company reported revenue growth of more than 55% year over year, mainly driven by accelerating sales of Mounjaro and Zepbound. Management also raised its full-year guidance, showing strong visibility despite production constraints and rising competition.
Longer term, expectations remain high. Earnings per share are projected to exceed US$44 next year, while annual revenue could approach US$100 billion. For a pharmaceutical company of this size, that pace of growth remains exceptional.
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More Than an Obesity Story
While obesity treatments remain the main growth driver, Eli Lilly does not rely on a single product or one therapeutic category. The company is also investing heavily in Alzheimer’s disease, cancer, cardiovascular conditions and autoimmune disorders.
Its Alzheimer’s treatment, Kisunla, is attracting particular attention in a market where medical needs remain very high. With a well-filled research portfolio, Lilly has several long-term growth drivers beyond Mounjaro and Zepbound.
This diversification matters. It allows investors to view Lilly not only as a GLP-1 leader, but also as a pharmaceutical innovation platform capable of generating growth across several areas of healthcare.
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Why the Stock Remains Interesting
Eli Lilly brings together several qualities we look for in a high-quality company: strong organic growth, clear leadership in an expanding market, excellent innovation capacity and a solid research portfolio.
The obesity market represents a major structural opportunity. This is not simply a short-term trend, but rather a lasting shift in the way healthcare systems address metabolic diseases. With Mounjaro, Zepbound, retatrutide and new oral options in development, Lilly has several levers to maintain its lead.
The company also benefits from an important advantage: execution. In a sector where research, regulation, production and distribution are critical, Lilly has shown that it can turn scientific innovation into real revenue. The strong demand for its treatments is forcing the company to invest heavily in production capacity, but that constraint mainly reflects the size of the market opportunity.
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What to Watch
The valuation remains elevated. The stock trades at around 30 times forward earnings, a premium to the large-cap pharmaceutical industry average, estimated at roughly 18 times. That said, this valuation is not very far from the S&P 500 multiple, around 23 times, especially when considering Lilly’s superior growth profile.
The market is paying a premium for visibility, the quality of the research portfolio and leadership in obesity. That premium, however, requires solid execution. Lilly will need to continue expanding production capacity, defending market share and maintaining its clinical lead against Novo Nordisk, Amgen, Pfizer and other emerging competitors.
Key items to monitor include pricing pressure, regulatory oversight, manufacturing challenges and intensifying competition. Even so, Lilly maintains a very strong competitive position thanks to the quality of its clinical data, the commercial strength of Mounjaro and Zepbound, and the depth of its research portfolio.
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Conclusion
Eli Lilly is no longer just a large defensive pharmaceutical company. It is now a leading growth company, supported by major structural markets such as obesity, diabetes and next-generation metabolic treatments.
Crossing the US$1 trillion market capitalization mark confirms the scale of this transformation. Few pharmaceutical companies have generated this level of investor interest, especially with such a visible growth trajectory.
We added Eli Lilly to our portfolios before this strong move, as part of a disciplined positioning strategy focused on a very high-quality company exposed to durable growth trends in healthcare. This decision reflects our approach: identifying leaders capable of creating value over several years before the market fully recognizes the scale of their potential.
In our view, the stock remains attractive for a portfolio focused on quality and sustainable growth. The valuation now requires more discipline, but the fundamentals remain strong: robust demand, rapidly accelerating revenue, a promising research portfolio, scientific leadership and the ability to turn innovation into tangible growth.
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Markets in Brief
Monday
U.S. markets were closed on Monday for the Memorial Day holiday. Trading resumed Tuesday on Wall Street in a shortened but active trading week.
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Tuesday
S&P 500: 7,519.12 (+0.61%) — new record close
Nasdaq: 26,656.18 (+1.19%)—new record close
Dow Jones: 50,461.68 (-0.23%)
S&P/TSX: 34,653.87 (-0.51%)
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Canadian Dollar
The Canadian dollar traded around 72.40 cents U.S., slightly lower than the previous session.
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Macroeconomic Analysis
Wall Street started the shortened week on a positive note, with the S&P 500 and Nasdaq both closing at new record highs. The market was supported by renewed risk appetite, driven by hopes of diplomatic progress between Washington and Tehran, despite new U.S. strikes in southern Iran. For now, investors appear to be leaning toward a potential de-escalation scenario, which helped support growth stocks and the broader technology sector.
That said, the session was more mixed beneath the surface. The Dow Jones ended lower, while the TSX also declined in Toronto, suggesting that market participation remained uneven. Oil also stayed in focus, with Brent crude moving back near US$100 per barrel as geopolitical tensions continued to add a risk premium to energy prices.
On the macroeconomic front, U.S. consumer confidence slipped slightly in May, reflecting concerns tied to inflationary pressures linked to the Middle East conflict. The data did not derail Wall Street’s momentum, but it served as a reminder that the broader environment remains fragile. Markets will now turn their attention to the April PCE inflation report, the Federal Reserve’s preferred inflation gauge.
The market message remains balanced: optimism has returned through technology and hopes of de-escalation, but rates, oil and inflation continue to play a central role in investors’ decision-making.
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Stocks in Brief
• Micron Technology (MU): +19.29%—the stock surged after UBS sharply raised its price target. The company crossed US$1 trillion in market capitalization for the first time, confirming the market’s enthusiasm for memory chips tied to artificial intelligence.
• Western Digital (WDC): +8%—the stock benefited from strong demand for memory-related names and data centre exposure.
• Seagate Technology (STX): +4%—Seagate was also supported by the positive momentum across memory-related stocks.
• AMD (AMD): +7.78% — the stock was lifted by strength in the semiconductor sector, following Micron’s rally and renewed appetite for AI-linked names.
• Broadcom (AVGO): +1.90%—the stock continued to advance, supported by investor interest in artificial intelligence infrastructure.
• Texas Instruments (TXN): +5.07%—the stock also benefited from the favourable move in semiconductor names.
• AutoZone (AZO): -8.91%—the stock declined after quarterly revenue came in slightly below expectations, despite earnings per share beating consensus.
• Ferrari (RACE): -5.23%—the stock lost ground after the unveiling of its first fully electric vehicle, a strategic shift that appears to have left some investors more cautious.
• Eli Lilly (LLY): +0.17%—the stock was relatively stable after the company announced acquisitions totalling nearly US$4 billion in treatments for infectious diseases.
• Intel (INTC)—the stock came under pressure after Northland Capital Markets downgraded the name, citing a more demanding valuation following its strong year-to-date performance.
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Wednesday
Dow Jones: 50,644.28 (+0.36%)—new record close
S&P 500: 7,520.36 (+0.02%) — new record close
Nasdaq: 26,674.73 (+0.07%)—new record close
S&P/TSX: 34,412.05 (-0.70%)
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Canadian Dollar
The Canadian dollar remained relatively stable, as investors focused mainly on the pullback in oil prices and the upcoming U.S. inflation data.
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Macroeconomic Analysis
Wall Street ended slightly higher on Wednesday, enough for all three major U.S. indexes to reach new record closes. The move was much more moderate than Tuesday’s rally, with some profit-taking in several technology names after their recent strength.
The main support for the market came from the sharp decline in oil prices. WTI fell more than 5%, helped by hopes of de-escalation between the United States and Iran. For investors, lower oil prices ease some inflation concerns and improve the overall market tone. Airlines, cruise operators and travel-related names benefited from the move.
In Toronto, the TSX fell 0.70%, weighed down by weakness in the energy sector. Markets are now focused on the April PCE inflation report in the United States, the Federal Reserve’s preferred inflation gauge, which could influence rate expectations for the coming months.
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Stocks in Brief
• Micron Technology (MU): +3.63%—the stock continued to climb after Tuesday’s surge, further consolidating its entry into the group of companies with a market capitalization above US$1 trillion.
• Qualcomm (QCOM): -6.20%—the stock pulled back as investors took profits in semiconductor names.
• Texas Instruments (TXN): -2.29%—the stock declined alongside broader weakness in parts of the technology sector.
• Nvidia (NVDA): -1.05%—the stock slipped slightly after a strong recent run in artificial intelligence-related names.
• Abercrombie & Fitch (ANF): +8.88%—the stock jumped after earnings per share came in above expectations.
• Delta Air Lines (DAL): +3.04%—the stock benefited from lower oil prices, which improve the cost outlook for airlines.
• Carnival (CCL): +4.75%—the cruise operator advanced as energy prices moved lower.
• Royal Caribbean (RCL): +2.79%—the stock also gained as investors showed renewed interest in travel-related names.
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Thursday
Dow Jones: 50,668.97 (+0.05%) — new record close
S&P 500: 7,563.63 (+0.58%) — new record close
Nasdaq: 26,917.47 (+0.91%) — new record close
S&P/TSX: 34,517.70 (+0.31%)
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Canadian Dollar
The Canadian dollar traded around 72.42 cents U.S., slightly higher than Wednesday, as market sentiment improved on hopes for a more durable truce in the Middle East.
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Macroeconomic Analysis
Wall Street continued to climb on Thursday, with all three major U.S. indexes posting another record close. The market was supported by two key factors: hopes for a provisional agreement between the United States and Iran that would extend the ceasefire by 60 days, and slightly more favourable U.S. inflation data.
The S&P 500 and Nasdaq benefited from renewed appetite for technology, while the Dow Jones posted a more modest gain. Oil remained volatile, but its early gains largely faded after headlines around the provisional agreement. For markets, a more durable de-escalation in the Middle East would help reduce pressure on energy prices, inflation and interest rates.
In Toronto, the TSX gained 0.31%, supported in part by stronger-than-expected results from the major Canadian banks and a more constructive backdrop for risk assets. Gold also moved sharply higher, gaining US$50.90 to reach US$4,532.40 per ounce.
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Stocks in Brief
• Snowflake (SNOW) — the stock jumped after better-than-expected results and the announcement of a US$6 billion contract with Amazon Web Services, reinforcing investor interest in data and cloud-related names.
• Dollar Tree (DLTR) — the stock moved higher after results came in above expectations, in a market that continues to reward companies able to execute despite a more selective consumer.
• Hormel Foods (HRL) — the stock was supported by results that were better received than expected, adding to the positive tone in some defensive consumer segments.
• Nvidia (NVDA) — the stock remained at the centre of market attention in an environment still driven by artificial intelligence, although Thursday Nasdaq gains broadened beyond the largest AI names.
• Canadian banks — the major Canadian banks supported the domestic market after reporting results above expectations. Capital markets divisions contributed positively to earnings.
• Energy stocks — the sector remained volatile alongside oil prices. Hopes for a more durable Middle East agreement improved the broader market tone, but also limited upside for producers as crude prices lost part of their geopolitical premium.
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Friday
Session in progress
Dow Jones: +0.6%
S&P 500: +0.2%
Nasdaq: +0.1%
All three major U.S. indexes reached fresh intraday highs on Friday, in a session still supported by technology and hopes for a more durable de-escalation in the Middle East. The Nasdaq was on track to end May with a gain of roughly 8%, compared with about 5% for the S&P 500 and 2% for the Dow Jones. For the week, the Nasdaq was also leading, with a gain of more than 2%, ahead of the S&P 500, which was up more than 1%.
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Stocks in Brief
• Dell Technologies (DELL): +28% — the stock surged after better-than-expected results and an increase in full-year guidance. Demand for artificial intelligence servers remains a key growth driver.
• Micron Technology (MU): +4% — the stock continued to advance. Micron is now up roughly 86% for the month, supported by strong investor demand for memory chips used in AI infrastructure.
• Qualcomm (QCOM): +2% — the stock also moved higher, bringing its monthly gain to about 39%, despite recent volatility.
• Eli Lilly (LLY) — the stock remained in focus after a strong May performance. Barclays remains constructive on the name, with a US$1,400 price target, about 24% above Thursday’s close. The stock has gained more than 20% in May, supported by increased Zepbound coverage and volume growth in obesity treatments.
• Amazon (AMZN) — Truist raised its price target to US$320, citing cloud growth and AWS-related revenue momentum. The stock is up about 19% since the beginning of 2026.
• Alphabet (GOOGL) — Truist also raised its price target to US$430, supported by Google Cloud growth prospects. The stock is up about 25% year to date.
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Weekly Conclusion
The week is ending on a clearly positive note for markets. After a U.S. holiday on Monday, Wall Street quickly regained momentum, supported by fresh records for the S&P 500, the Nasdaq and the Dow Jones. The Nasdaq remains the clear leader, with a gain of roughly 8% in May, helped by semiconductors, AI infrastructure and strong results from several major technology companies.
The pullback in oil also helped improve market sentiment. Hopes for a more durable truce between the United States and Iran reduced part of the geopolitical premium in energy prices, easing some inflation concerns. For investors, this matters: less pressure on oil can mean less pressure on rates and a better environment for growth stocks.
That said, the main message of the week remains earnings strength. Markets are not rising only on hopes of geopolitical de-escalation; they are also moving higher because several companies continue to deliver strong results. Technology, in particular, continues to show that demand tied to artificial intelligence is increasingly translating into real revenue.
In short, the week showed that markets remain capable of advancing despite a complex backdrop. The records reached this week reflect renewed confidence, better visibility on energy and continued leadership from technology. For portfolios, it confirms the importance of staying exposed to high-quality companies that can benefit from major structural trends while maintaining disciplined risk management.
