Novo Nordisk Is Teaming Up With Nvidia. Should You Buy NVO Stock Now?
Novo Nordisk (NVO) is a healthcare company that discovers, develops, and markets medical products. The company operates in two main segments: diabetes and obesity care and rare diseases.
Tracing its roots back to the 1920s, it operates globally and is based in Denmark.
About Novo Nordisk Stock
Novo Nordisk’s stock is experiencing strong demand, driving a more than 35% bounce off its year-to-date low. However, despite this demand, the stock remains 20% below its year-to-date high and is down nearly 50% over the past year.
Novo Nordisk Misses Revenue Estimates
Novo Nordisk announced its first-quarter results on May 7. The company posted net income of 29 billion DKK, up 14% year-over-year. Diluted earnings per share of 6.53 DKK were up 15%, in line with analyst estimates.
Novo Nordisk posted total revenue of 78.1 billion DKK, up 19% year-over-year but missing analysts’ estimate. Obesity Care sales jumped 65% to 18.4 billion DKK while Rare Diseases revenue grew 3% YoY.
For the ongoing fiscal year, the company revised its guidance down. It now expects revenue to grow between 13% to 21% compared to the 16% to 24% announced previously. It expects operating profit to grow at 16%-24%, down from 19%-27%. This revised outlook is a result of lower penetration of GLP-1 treatments in the U.S.
Novo Nordisk Partners with Nvidia
Nvidia (NVDA) announced a partnership with Novo Nordisk at its GTC Paris event. The deal aims to speed up efforts in drug discovery by incorporating artificial intelligence (AI).
As per the agreement, both companies will focus on developing customized AI models that can be used by Novo‘s researchers for early stage clinical development and advanced simulation.
Commenting on the arrangement, an Nvidia executive said “Working with Novo Nordisk, we’re advancing critical R&D applications with fundamental tools that can harness the full potential of generative and agentic AI to improve pharmaceutical development.”
Analyst Takes on NVO Stock
Analysts aren’t fully convinced with the stock as reflected by the consensus “Moderate Buy” rating. However, the mean price target of $94.67 indicating upside potential of 22%.
Of the 18 analysts in coverage, eight rate it a “Strong Buy,” seven rate it “Hold,” one rates it “Moderate Sell,” and two give it “Strong Sell” ratings.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.