The “Magnificent Seven” originally made the headlines as a Western back in 1960, but in recent times, it’s entered the investing world. Bank of America analyst Michael Hartnett first used the term last yr to seek advice from a gaggle of stocks that are industry leading, each known for its strengths in some sort of technology. These players, amongst probably essentially the most heavily weighted throughout the S&P 500, have helped the benchmark soar into bull territory over the past yr or so and can proceed to drive gains due to their growth prospects.
These top stocks are: Alphabet, Apple, Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla.
But there’s one obvious element missing from this group: a healthcare company that is definitely outperformed five of the Magnificent Seven stocks over the past yr. And this player also now represents a fair greater position throughout the S&P 500 than one among the Magnificent Seven stocks. Is that this company heading in the right direction to show into the next Magnificent Seven company? Let’s discover.
A path to the Magnificent Seven?
First, it can be crucial to note that the Magnificent Seven will not be some sort of group or club that periodically welcomes recent members. So, for Lilly to usher throughout the era of the “Magnificent Eight” or for a recent stock to modify a current player throughout the Magnificent Seven, there aren’t any official procedures to follow. The investment community as a whole would should begin referring to this group since the “Magnificent Eight” – or clearly and broadly seek advice from one stock not making the cut throughout the Magnificent Seven and one other taking on.
There will not be any guarantee any of that which will occur. But when it does, my prediction is healthcare giant Eli Lilly (NYSE: LLY) will enter this elite group of stocks. Lilly, gaining about 130% over the past yr, has outperformed all of the Magnificent Seven except Meta and Nvidia — they climbed greater than 140% and 250%, respectively.
And Lilly has grown to show into the eighth most heavily weighted stock throughout the S&P 500, surpassing Tesla, which has fallen to the No. 10 spot.
Why would Lilly make an incredible addition to the Magnificent Seven? Because the company’s growth may beat even that of the group’s best performer, Nvidia. Lilly is heading in the right direction to deliver 50% growth annually over the approaching five years — that’s higher than Nvidia’s 35% annual growth estimate over the an identical period.
A $100 billion market
And driving Lilly’s growth is a program with significant potential, the company’s weight reduction drug portfolio. The worldwide weight reduction drug market may reach $100 billion by 2030, growing 16 times from today’s level, based on Goldman Sachs Research. And this forecast will not be surprising considering the trend Lilly and rival drugmaker Novo Nordisk have seen for his or her weight reduction drugs: demand has surpassed supply, prompting each corporations to ramp up manufacturing infrastructure.
Lilly makes two drugs — Mounjaro and Zepbound — that doctors have been prescribing for weight reduction. The previous officially was approved for type 2 diabetes, while the latter was approved specifically for weight management — each are the an identical molecule, tirzepatide. It really works by acting on two hormone pathways involved in digestion and has produced compelling ends in clinical trials and within the actual world. Lilly can be developing a third candidate, retatrutide, which may even outperform these current products because it acts on an extra hormone.
Lilly doesn’t rely on its weight reduction drug platform alone for earnings though. This big pharma player has a broad portfolio of products along with a deep pipeline. However the burden loss program, which already is bringing in billions of dollars in revenue, could represent an infinite growth driver over the approaching years — making this healthcare player a growth stock that may easily claim a spot amongst the various Magnificent Seven.
What this suggests for you
What does this mean for you as an investor? A possible spot on this group of stocks could buoy Lilly stock for a day or two, but inclusion throughout the Magnificent Seven or one other list will not be what makes Lilly a buy. Its growth potential does. Considering the demand for weight reduction drugs today and likely down the road too and Lilly’s work on recent candidates, prospects look sensible. On top of this, Lilly’s portfolio of other products can be driving earnings — and the pipeline may ensure this growth will last.
Lilly today trades for 61x forward earnings estimates, which looks expensive for a pharma stock — but this company is looking more like a growth stock, making this valuation look reasonable.
So, whether my prediction is true or not, Eli Lilly is a top growth stock to buy today and hold onto for the long term.
Do you will have to speculate $1,000 in Eli Lilly immediately?
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Idiot’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Idiot’s board of directors. Adria Cimino has positions in Amazon and Tesla. The Motley Idiot has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Idiot recommends Novo Nordisk and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure policy.
Prediction: This Will Be the Next “Magnificent Seven” Stock was originally published by The Motley Idiot