Baron Funds Sees Eli Lilly’s (LLY) Mounjaro, Zepbound and Orforglipron as Transformational Maham Fatima Thu, November 12, 2026 at 6:32 AM EST 4 min read LLY +2.32% ^GSPC +1.31% ^IXIC +1.60% Trade LLY on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
We recently published the list of the 10 Best Growth Stocks to Buy for the Next Decade, and Eli Lilly (NYSE:LLY) came in 9th.
On November 5, the S&P 500 fell 4.36%, its worst day since the April 2025 tariff crash, with roughly $3 trillion in value wiped off S&P 500 companies. The Nasdaq Composite dropped 5.52% to slip into a correction, and chip stocks took the hardest hit, with the Philadelphia Semiconductor Index falling about 12%, its worst day since 2020. The slide followed a rough October, when the technology sector of the S&P 500 lost 6.8%, its biggest monthly drop since March 2025, while defensive groups such as consumer staples had a record month. Growth stocks tend to feel these swings first, because their prices rest on the promise of faster sales and earnings than the rest of the market.
The worry behind the selling is money. Investors are asking how companies will pay for their enormous artificial intelligence budgets and whether the returns will justify them. The midterm election results added a second concern, as investors began questioning whether the pace of data center construction could slow if new rules follow, which would weigh on AI spending. Our ranking of semiconductor stocks to hold for the next decade covers more of the group that took the sharpest hit.
A growth stock is a share in a company expected to grow its sales and earnings faster than the market average. These companies usually reinvest profits instead of paying dividends, so shareholders are rewarded through a rising share price, which is why the shares often carry high price-to-earnings ratios. A high multiple is not automatically expensive if the growth keeps coming, but it leaves little room for disappointment, and a stock priced for strong growth can fall sharply when the numbers fall short. Time helps in the other direction, because returns that stay invested earn returns of their own, a snowball effect that builds the longer the money is left alone.
The economy is adding another variable. October's jobs report showed payrolls up 165,000, far above the 65,000 economists expected, and traders now put the odds of a Federal Reserve rate hike in December above 75%. Edward Jones senior global strategist Angelo Kourkafas called it a "blowout jobs report." A strong economy is good for business, but higher interest rates make far-off earnings worth less today, which tends to weigh most on growth stocks. For readers hunting for bargains after the pullback, our list of undervalued growth stocks is a place to start. For long-term holders, the more useful question is not what the market does next month but which companies can keep compounding through several more months like this one.
Lilly sits on the list with a market cap of $1.33 trillion and 152 hedge fund holders in Q2 2026.
Cathie Wood's Ark Invest bought Lilly shares this year, treating it as the GLP-1 leader with a deep pipeline in other diseases. Baron Funds, founded by Ron Baron, wrote in a shareholder letter that it sees Mounjaro, Zepbound, and the oral drug orforglipron as transformational and expects this drug class to become the standard of care for diabetic and non-diabetic obese patients alike. Ken Griffin's Citadel also nearly quadrupled its stake in the second quarter.
The latest quarter shows how that demand is building. Revenue rose 39% to $24.4 billion, led by Mounjaro and Zepbound, and Lilly raised its 2026 revenue outlook by $5.5 billion at the midpoint. Chief Executive Officer David Ricks said the growth came from broad global consumer demand for the two drugs, the global launches of Foundayo, and expanded US coverage.
The pipeline is the other half of the pitch. Lilly reported positive Phase 3 results for retatrutide in a head-to-head trial against Ozempic in adults with type 2 diabetes, and said Phase 3 trials of another candidate are set to start. For the bulls, that steady flow of new medicines is what lets Lilly keep growing after today's best sellers mature.
You can read our analysis on Eli Lilly (LLY) here: Eli Lilly (LLY) Grew Revenue 48% While Prices Fell, Can Volume Keep Winning?
While we acknowledge the potential of LLY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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