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Retail investors have been pivoting to pharma names like Eli Lilly in the last week, JPMorgan said.
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The makers of popular obesity drugs have seen their stock prices soar in recent months.
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Bank of America this month predicted Eli Lilly stock could soar 30% as sales of its obesity drug skyrocket.
Retail traders were net sellers of most stocks that make up the Magnificent Seven last week, with focus shifting to pharmaceutical names like Eli Lilly, JPMorgan said in a note on Wednesday.
Individual traders sold $1.4 billion worth of individual stocks in the past week, dumping titans like Tesla, Apple, Alphabet, and Microsoft, according to JPMorgan analysts.
While Nvidia still looks to be a cash magnet for the retail cohort, inventors’ focus shifted in the last week to big pharma players like Eli Lilly, Pfizer, and Novo Nordisk, the note said. Retail investors poured $4.7 billion into funds as they were net sellers of single-name stocks, the bank said.
Individual traders’ appetite for pharma stocks comes as companies including Eli Lilly and Novo Nordisk see a wave of bullish commentary around the impact of obesity drugs that have soared in popularity in the last year.
Eli Lilly this month was given a street-high price target of $1,000 per share from Bank of America, signaling a potential upside of 30%. The drug maker’s GLP-1 weight loss drug is poised for success, the bank said, projecting over $60 billion in sales by 2030.
With the Centers for Disease Control and Prevention putting the US obesity rate at around 40%, drugs from Eli Lilly, Novo Nordisk, and Pfizer are expected to keep soaring in popularity in the coming years, and analysts have said they predict their use could jump from 1% to 15% of Americans taking these drugs by 2035.
Meanwhile, the AI-driven frenzy has shown some signs of cooling recently. Goldman Sachs said in late February that hedge funds were selling tech stocks at the fastest pace in seven months, following a six-week buying streak leading up to Nvidia’s quarterly earnings.
Some have said recently that it may be time for the Magnificent Seven moniker to be retired. Mike O’Rourke, the analyst who coined the term, has noted that their fortunes have diverged sharply in recent months and that they can no longer be thought of as a single cohort.
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