After experiencing a pullback of more than 10% in late December, Eli Lilly shares have climbed approximately 8% over the past two weeks, positioning the stock just below its long-term buy point. Investors are reacting positively to the company’s announcement of a collaboration with Nvidia to leverage advanced artificial-intelligence models for accelerating drug-discovery efforts. Under the agreement, Lilly will gain access to Nvidia’s latest AI hardware and software tools, aiming to reduce early-stage compound screening times by up to 40%. This partnership is expected to complement Lilly’s existing internal AI initiatives, which have already shaved an average of three months off lead optimization timelines in oncology research.

Weight-loss treatments remain the primary engine of growth for Lilly’s top line. In the fourth quarter, sales of the dual agonist for diabetes and obesity grew 75% year-over-year, contributing more than $2.8 billion to revenue. The obesity indication alone added approximately $1.1 billion, exceeding consensus forecasts by 12%. Management projects that obesity therapies will account for roughly 30% of total product revenue by 2027, up from 18% in 2024, as the oral formulation launches later this year.

At the recent JPMorgan Healthcare Conference, Chief Scientific Officer Dan Skovronsky outlined Lilly’s late-stage pipeline priorities. The company plans to initiate Phase 3 trials this quarter for an oral GLP-1 candidate designed for once-daily dosing, with interim data expected in the second half of 2027. Additionally, Lilly is conducting head-to-head studies comparing its next-generation triple-agonist injectable, which targets GLP-1, GIP and glucagon receptors, against the current standard. Early results presented last December showed an average weight loss of 28% at 68 weeks in trial participants, a record for the class. Skovronsky emphasized that these advancements will help solidify Lilly’s position as a leader in metabolic disease treatment.

Eli Lilly closed December with cash, cash equivalents and marketable securities totaling $8.3 billion, against long-term debt of $12.5 billion. Free cash flow reached $5.6 billion in fiscal 2025, up 22% year-over-year. The board has approved a 15% increase in the quarterly dividend, raising the payout to $1.21 per share, and authorized an additional $10 billion for share repurchases over the next two years. Management reiterated its target of returning at least 60% of free cash flow to shareholders annually through dividends and buybacks.