What We Learned This Week

Incredibly High Bar: Nvidia’s quarterly update was once again the most anticipated earnings release of the season, and the story remains the same: they are selling every chip and GPU they can produce, with no signs of a slowdown in AI or data center demand. Fundamentals remain staggering - revenue up more than 50% year-over-year off a $30B base. But with the stock nearly tripling last year and already up 35% this year, upside surprises are almost impossible. In this environment, even a small miss against the loftiest expectations gives investors a reason to take profits. This quarter, that nitpick was softer data center revenue versus the highest analyst estimates, complicated by ongoing uncertainty around what Nvidia can and can’t ship into China. That said, the situation has improved somewhat as management has engaged with regulators, paving the way for a gradual resumption of sales there.

So what do you do with a stock like this? Near-term trading is tough with expectations set sky-high and Nvidia now the most valuable company in the world. Betting against Jensen Huang hasn’t exactly been a winning strategy, but upside from here is harder to call in the short run. The long-term view is clearer: Nvidia has firmly established itself at the center of the AI revolution and continues to execute. If you believe in the multi-year trajectory of this industry, short-term noise shouldn’t matter - you hold the stock and trust they stay competitive. If you don’t, it’s never wrong to take profits.

GLP-1 Pills are Coming: Eli Lilly’s weight-loss pill orforglipron cleared its latest late-stage trial this week, paving the way for global approval filings. The daily oral treatment for patients with obesity and type 2 diabetes met both of its primary goals: an average 10.5% reduction in body weight over 72 weeks versus 2.2% for placebo, and meaningful improvement in blood sugar levels. Importantly, unlike Novo Nordisk’s similar oral candidate, Lilly’s pill does not require dietary restrictions, potentially giving it an adoption advantage. The success also positions Lilly to expand access and supply in a market still straining to meet massive demand for GLP-1 drugs.

The stock moved higher on the news, reflecting expectations for strong uptake and market share gains. Still, the competitive landscape remains fierce, with Novo Nordisk as the main rival and compounding pharmacies continuing to sell alternatives despite easing supply constraints. The opportunity here is enormous given the global obesity epidemic and the appeal of a convenient oral option, but execution will be critical. If Lilly maintains its edge in efficacy, supply, and distribution, it stands to dominate. If not, competitors are ready to capitalize quickly.