On October 16, the Philadelphia Semiconductor Index fell for an eighth straight session, erasing $2 trillion in market value. A hot inflation report raised the odds of another Fed rate hike, while surging bond yields at CoreWeave revived worries about how much of the AI buildout runs on debt.
However, the selling has not hit everything “AI” related. Over the last week, Eli Lilly rose almost 10% and made a new high, all while chip stocks (SMH) fell 5.0%. In fact, Eli Lilly is up 40% over the last six months.
In this post, myself and and AKS Research take a look at Eli Lilly, the preeminent artificial intelligence company in healthcare, and its role in the ecosystem.
This is the second post in our series. Part one explored where AI is already delivering results across the lab, clinic, and hospital, along with the guardrails slowing its adoption, where the technology is heading, and the four focus areas we will examine going forward.
This post is for informational purposes only and does not constitute financial advice. Please conduct your own due diligence before purchasing any equities or assets discussed herein.
Layout:
Overview of Eli Lilly
Business Model
How the Market Prices LLY
What Comes After Tirzepatide?
What the Market May Be Missing
Risks
Financials and Valuation
Investment Thesis
Current Position and Plans
Overview of Eli Lilly
Eli Lilly is a 150-year-old drugmaker based in Indianapolis with roughly 50,000 employees, developing treatments across cardiometabolic health, oncology, immunology, and neuroscience. Powered by its blockbuster diabetes and obesity medicines, Mounjaro and Zepbound, Lilly became the first healthcare company to cross a $1 trillion market valuation on November 21, 2025. Today, it is roughly the size of Johnson & Johnson and AbbVie combined, yet it continues to grow at a pace rarely seen at that scale. After surging 45% to $65.2 billion in 2025, revenue jumped another 48% to $23.0 billion in Q2 2026, prompting management on August 5 to raise full-year revenue guidance to between $85 billion and $87 billion.
Behind that commercial success, Lilly has quietly become one of the largest AI spenders in medicine. After becoming Isomorphic Labs’ first pharma partner in January 2024, Lilly accelerated its push in early 2026 by launching a five-year, $1 billion co-innovation lab with NVIDIA in January. They switched on LillyPod, the pharmaceutical industry’s most powerful supercomputer, in February. They paid Insilico Medicine $115 million upfront for AI-discovered drug candidates in March. Lilly also signed a deal worth up to $2.25 billion with Profluent for AI-designed gene-editing enzymes in April.