Eli Lilly: The GLP-1 Giant That Briefly Hit $1 Trillion

Eli Lilly stock may have ticked down Wednesday, but it's hardly struggling—up 40% over the past year and briefly crossing $1 trillion in market cap earlier this month. The catalyst is obvious: Mounjaro and Zepbound, the company's GLP-1 injectables for weight loss and diabetes, are posting monster numbers.

Revenue in Q1 2026 soared 56% to $19.8 billion, with net income more than doubling. Both figures blew past Wall Street expectations. Management raised full-year guidance to $82-85 billion in revenue (up 26-30%) and adjusted earnings of $35.50-$37 per share (up 47-53%).

But here's the tension: despite a sprawling portfolio of drugs, Mounjaro and Zepbound accounted for 56% of last year's revenue. With global pricing pressure on those injectables likely mounting, Eli Lilly needs its newly approved oral weight-loss drug Foundayo—cleared by the FDA in April—and other pipeline candidates to deliver. At just over 30 times this year's projected earnings, the valuation leaves little room for stumbles.

Block: Flat Stock, Flat Revenue—But a Shift Is Underway

Block, the fintech formerly known as Square, has gone nowhere over the past year—stock flat, investor interest tepid. The company runs a formidable suite: Square for point-of-sale processing, Afterpay for buy-now-pay-later, CashApp as a consumer wallet, and several crypto platforms. Wall Street isn't impressed.

Revenue rose just 0.3% last year. The silver lining: top-line growth has accelerated sequentially for four straight quarters, reaching 4.9% year-over-year in the most recent report. It's modest, but the trend is unmistakably positive.

With shares trading at a forward earnings multiple in the high teens, Block isn't expensive if that acceleration continues. Wood's bet seems to hinge on sustained momentum—a turnaround story in early innings, not a momentum play.

Coinbase: Down 37% and Waiting for Bitcoin to Wake Up

Coinbase has the ugliest chart of the three—shares down 37% over the past year as Bitcoin itself has slumped 39%. The leading U.S. crypto exchange is feeling the chill: after several quarters of growth, revenue declined 22% and 31% in the last two reports. Profitability is expected to fall sharply for the second consecutive year.

The diagnosis is straightforward: when crypto trading enthusiasm fades, Coinbase's core business suffers. The company could diversify to reduce dependence on volatile trader activity, but that pivot isn't materializing yet.

Wood's move here is a pure conviction call on digital currencies staging a comeback. If Bitcoin rallies, Coinbase will follow. If it doesn't, neither will the stock. There's no moat beyond the bet itself.

The Numbers Behind Each Position

Wood's Pattern: Buy the Dip, Build the Position

All three stocks slipped on Wednesday, the day Wood made her buys. That's no coincidence—she's known for adding to positions on down days, building conviction incrementally rather than chasing rallies.

The trio reflects different stages of a cycle: Eli Lilly riding a structural tailwind with valuation risk, Block mid-turnaround with momentum still fragile, and Coinbase entirely dependent on an asset class that's been out of favor. Wood isn't buying strength—she's buying thesis, betting these names recover before the crowd notices.

FAQ

Why does Cathie Wood buy stocks when they're down?

Wood typically adds to positions on down days, using short-term weakness to build long-term holdings at better prices. It's a deliberate strategy—she's not chasing momentum but accumulating conviction names when sentiment is softer.

Is Eli Lilly overvalued at 30x earnings?

At 30 times forward earnings, Eli Lilly is priced for sustained growth. The valuation is justified if Mounjaro, Zepbound, and Foundayo keep delivering—but with 56% of revenue concentrated in two drugs and pricing pressure looming, execution risk is real.

What would it take for Coinbase to turn around?

A rally in Bitcoin and broader crypto markets. Coinbase's revenue is tightly correlated with trading activity, which dried up as Bitcoin fell 39% over the past year. Without a rebound in digital asset enthusiasm, the stock has little catalyst.

This content is for informational purposes only and does not constitute investment advice. All investment decisions carry risk, including potential loss of principal. Consult a qualified financial advisor before making any investment decisions.