After a massive loss for Tesla on Thursday January 2024 the weight-loss drug maker Eli Lilly overtook Elon Musk’s Tesla in valuation. This happened as Eli Lilly gets more hype because of different world changing projects that they are working on while Tesla faces more issues with their electric vehicles.
Massive losses for Tesla
Elon Musk’s Tesla Inc. suffered huge losses on Thursday. The company lost $80 billion in valuation overnight. This was due to investors’ fears about the company’s future, especially in 2024. As a result, Tesla lost its place among the 10 most valuable companies in the world after Eli Lilly overtook the car manufacturer. Having once been the fifth largest company in the world in the S&P 500, it is now struggling to stay in the top 10. On Thursday, Tesla’s share price plunged 12%, falling below Eli Lilly’s market capitalization. Tesla is currently valued at $589.13 billion, while Eli Lilly is valued at $600.55 billion. This came after a warning that Tesla’s rate of expansion will be “notably lower” this year, leaving investors curious about the company’s future.
Eli Lilly’s advantage as it overtakes Tesla
The main advantage Eli Lilly has at the moment is really the area it is in. As weight loss drugs are more talked about than ever before, the company is taking the lead in the weight loss drug industry just ahead of Novo Nordisk. Investors are hoping for Eli Lilly’s drugs such as Mounjaro or Zepbound. The company is also popular because it is the largest healthcare company in the world. Its main rival in this race is Denmark’s Novo Nordisk, which is the most valuable company in Europe.
A strategist at Interactive Brokers said on the recent events that “markets tent to favor big broad trends and certainly one of those trends at one point was electric vehicles and all things Tesla”. She added “Right now, the trends that are really gripping investors are artificial intelligence and GLP1 weight loss drugs”. That explains why the companies experience such a different feeling of investors right now.
Eli Lilly has been rising steadily since 2023. Last year ended with a bullish 59% and it has already gained another 7.7% in 2024. The trend is upwards as analysts expect the stock to continue to rise as sales of Mounjaro and Zepbound increase.
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