If you’re an investor focused on growth, you may have spent a fair share of your time at least watching Nvidia (NASDAQ: NVDA) stock in recent times — even if you haven’t jumped in to invest in this high-flyer. Nvidia dominates the artificial intelligence (AI) chip market, and that’s helped the company deliver triple-digit gains in revenue and profit. The stock has followed, climbing 126% so far this year.
But Nvidia isn’t the only player generating big returns for investors. In fact, an up-and-coming biotech stock actually has been crushing Nvidia in recent months. This stock has advanced 247% since the start of the year. And this past week, the stock soared more than 28% in one trading session after the company announced one of its product candidates would begin a late-stage clinical trial.
Let’s find out more about this stock that’s beating Nvidia — and whether it’s a buy right now for growth investors.
Image source: Getty Images.
Revolutionizing the Weight Loss Market
This top-performing biotech is Viking Therapeutics (NASDAQ: VKTX), a company working on candidates for metabolic and endocrine disorders — and the program that’s caught investors’ attention is one targeting weight loss. Big pharma companies already are generating billions of dollars in revenue from weight loss drugs, so success in the space could lead to major revenue for Viking too.
Viking is developing injectable and oral GIP and GLP-1 receptor agonists, treatments that act on hormones controlling blood sugar levels and appetite. Just last week, the company said it’s advancing VK-2735, its injectable candidate, into a phase 3 trial and has scheduled an end-of-phase 2 meeting with the U.S. Food and Drug Administration for later this year. In the phase 2 trial, VK-2735 delivered fantastic results, with the drug resulting in as much as 15% weight loss after 13 weeks of treatment.
At the same time, Viking announced the oral version of the potential drug would move into a phase 2 trial later this year after producing mean weight loss of as much as 5.3% after 28 days of dosing.
As I mentioned earlier, the news prompted a double-digit gain for the stock in just one trading session. Viking has shown such momentum in the past, soaring 120% in one February trading session after first announcing results from the VK-2735 clinical trial.
A Lucrative Market Opportunity
Investors are optimistic because the weight loss drug market is a high-growth one — and it’s set to keep on expanding. The market may increase by 16 to reach $100 billion by the end of the decade, according to Goldman Sachs Research. Today, pharma giant Eli Lilly already sells two GIP and GLP-1 receptor agonists and Novo Nordisk markets two similar drugs — and demand for all of them has exceeded supply. This tells us there’s room in the market for other players, and all of them could be very successful.
On top of this, there’s also the possibility that a big pharmaceutical or biotech company may offer to buy Viking as a way to enter the weight loss space.
All of this has pushed shares of Viking to major gains this year, with performance even surpassing that of AI powerhouse Nvidia.
Investment Considerations for Growth Investors
So, if you’re a growth investor, should you pile into Viking shares right now? This depends on your appetite for risk. If you’re a growth investor who favors companies with a strong existing revenue stream, Viking isn’t the right stock for you. The biotech doesn’t yet have products on the market, and even if all goes well for VK-2735, commercialization isn’t right around the corner — analysts expect it as of later this decade. Of course, a potential buyout could happen at any point and likely would lift the shares — but this wouldn’t result in a quicker time to market for a potential product.
I would even argue that the stock’s gains have come pretty quickly, especially for a company that doesn’t yet generate product revenue.
That said, if you’re a growth investor who’s comfortable with some risk, you may want to add a few Viking shares to your portfolio right now. As clinical development continues, each data report may represent a new catalyst for stock performance — and so far, Viking has shown the strength of its potential products, offering us reason to be optimistic.
It’s impossible to guarantee that this high-flying biotech will continue to outperform growth powerhouse Nvidia in the coming months. But here’s the good news: Even if it doesn’t, it still could score a win for your growth portfolio over time if the company’s promising weight-loss candidates continue progressing toward the finish line.
Is Viking Therapeutics a $1,000 Investment Opportunity?
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