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The "Magnificent Seven" are helping lift major U.S. indexes to record highs. This group of highly acclaimed stocks -- among the heaviest-weighted equities in the S&P 500 -- is comprised of Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. There are good reasons to invest in all seven of these corporations, and that's why they've performed so well in recent years.
However, some companies outside this clique are just as impressive and deserve to be considered on par with the Magnificent Seven. One of these corporations is Novo Nordisk (NYSE: NVO), a Denmark-based pharmaceutical giant. Here's why this drugmaker has earned consideration for inclusion in what would be called the Magnificent Eight.
NVO Total Return Level data by YCharts.
A longtime leader in diabetes care
Novo Nordisk has been around for several decades. Throughout its entire history, the company has been a leader in one key therapeutic area: diabetes care.
Through the development of various novel insulin products and other medicines aimed at diabetics, Novo Nordisk has helped contain this severe global health crisis. The company's ability to maintain a lead in this market, despite stiff competition from various other players, is impressive.
As of November 2023, Novo Nordisk had a 33.8% share of the worldwide diabetes market, up almost 2% year over year. The company is still innovating in this area, too. Last year, it submitted regulatory applications for icodec, a potential once-weekly insulin product, in the U.S., Europe, and China.
Here's why this matters: Diabetes patients who need insulin typically take it daily. A once-weekly option is more convenient, and eligible patients will be thrilled to make the switch.
Icodec should earn approval sometime this year if everything goes according to plan. Novo Nordisk's dominance in diabetes care has generally yielded solid financial results.
NVO Revenue (Quarterly) data by YCharts.
The performance of the company's stock has also been strong, with returns in the past decade that have been far better than that of the broader market. The Magnificent Seven are so named partly because of their ability to deliver outsized returns, clearly a point in Novo Nordisk's favor.
Expect more of the same
Novo Nordisk is making noise in another related therapeutic area -- obesity care. The company's weight loss medicine Wegovy became so popular that the demand outpaced the supply. The company is dealing with the issue of shortages as the anti-obesity drug market is projected to soar through the end of the decade.
The pharmaceutical giant has plenty of competition, including from its longtime rival in the diabetes market, Eli Lilly. And Amgen, Pfizer, and Viking Therapeutics are among the drugmakers looking to launch their own weight loss medicines.