We recently published a list of 10 Best Diabetes Stocks To Buy According to Billionaires. In this article, we are going to take a look at where Novo Nordisk A/S (NYSE:NVO) stands against other best diabetes stocks to buy according to billionaires.

The Growing Market and Innovation in Continuous Glucose Monitoring (CGM) Technology

The WHO estimates that 422 million people worldwide suffer from diabetes, with the majority residing in low- or middle-income countries. On average, diabetes directly contributes to 1.5 million deaths annually. Over the past few decades, there has been a steady rise in both the prevalence and the number of cases of diabetes. Nonetheless, the International Diabetes Federation estimates that 500 million people worldwide presently have diabetes, and that figure is predicted to increase by 25% by 2030 and 51% by 2045.

One medical device used to assist manage diabetes, both type 1 and type 2, is the continuous glucose monitor (CGM). The market has grown dramatically in recent years, and it is currently a rapidly expanding category of diabetes care equipment. The demand for advanced diabetes care goods, including insulin pumps, pens, and continuous glucose monitoring (CGM) equipment, was estimated by GlobalData to be worth $21.8 billion in 2023. GlobalData projects that the market will reach $33.4 billion in revenue by 2030, growing at a compound annual growth rate (CAGR) of 6.34%.

The GlobalData marketed products database shows that there are currently 97 products in the CGM category. Most of these devices are standard CGMs, with only a few being implanted sensors. 133 products are either approved or in the development stage, according to the GlobalData pipeline products database. The research indicates that this market niche is expanding quickly and is a hub for innovative new technologies like implantable CGMs.

Today, CGM technology incorporates AI. For example, Roche introduced Accu-Chek SmartGuide, a cutting-edge CGM gadget driven by predictive AI. At the launch, Julien Boisdron, Chief Medical Officer for Roche Diabetes Care, called it “a solution more than a CGM.” He described how the system, which consists of two algorithms and a sensor, aids in data visualization and prediction.

The Rise of GLP-1 Drugs: Opportunities, Growth, and Challenges

A new era of opportunity has arrived for the management of diabetes and its associated complications. These novel strategies can effectively treat the co-occurring conditions of obesity and diabetes. A class of drugs known as glucagon-like peptide-1 (GLP-1) agonists is used to treat obesity and type 2 diabetes mellitus (T2DM). By 2030, the GLP-1 market, which is equally driven by obesity and diabetes, is expected to grow to $100 billion. About 9% of Americans, or 30 million people, may be GLP-1 users by this point.

Twelve percent of adult Americans report having taken a GLP-1 drug at some point, according to the most recent KFF Health Tracking poll. In the previous five years, 22% of patients with a diagnosis of obesity or overweight also took GLP-1, while 43% of patients with diabetes had the drug. Adults who have heard “a little” or “a lot” about these medications have gone from 70% to 82% over the past year, while those who have heard “a lot” about them have increased from 19% to 32%.

However, problems have arisen due to the increased demand for these diabetes and weight-loss medications. An “explosion in the unlicensed sale of medication online” is a potential threat, according to the National Pharmacy Association (NPA). Semaglutides, which are sold under the brand name Ozempic, help persons with type 2 diabetes manage their blood sugar. However, in other countries, like the US, where they are sold under the name Wegovy, they are also commonly used to help people lose weight. NPA chairman Nick Kaye stated:

“Pharmacists remain deeply concerned that the current medicine shortages crisis could lead to an explosion in the unlicensed sale of medication online.”

Our Methodology

For our list, we selected diabetes-related stocks from the HRTS GLP-1, Obesity, and Cardiometabolic ETF, as well as the EDOC Telemedicine and Digital Health ETF. We then ranked these stocks based on the number of billionaire investors holding stakes in them, as per Insider Monkey’s database of Q4 2024, prioritizing those with the highest billionaire ownership.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

An elderly couple receiving insulin from a pharmacist, representing healthcare company's successful pharmaceutical products.

Novo Nordisk A/S (NYSE:NVO)

Number of Billionaires: 11

Dollar Value of Billionaire Holdings: $3,396,274,951

Novo Nordisk A/S (NYSE:NVO) is a global healthcare leader specializing in diabetes care, obesity management, and chronic diseases, with diabetes treatments making up 85% of its business. Its portfolio includes insulin analogs, GLP-1 receptor agonists, and oral antidiabetic drugs like Rybelsus, Ozempic, and Tresiba.

Novo Nordisk A/S (NYSE:NVO) delivered exceptional financial results in 2024, which was driven by strong demand for its diabetes and obesity treatments. Their revenue surged 25% to DKK 290.4 billion ($40.5 billion), with Q4 revenue alone rising 30% year-over-year. This growth was primarily fueled by semaglutide-based drugs like Wegovy and Ozempic, which generated DKK 186 billion ($24.9 billion), accounting for 60% of total sales.

The company’s profitability remained strong, with operating profit increasing 26% to DKK 128.3 billion and net profit rising 21% to DKK 101 billion. Despite higher R&D expenses (+48%), gross margin improved to 84.7%, reflecting efficient cost management. Operating cash flow reached DKK 121 billion, though free cash flow turned negative due to capital expenditures and the Catalent acquisition.

Investors remain optimistic about Novo Nordisk A/S (NYSE:NVO) due to pipeline innovation with promising drugs like CagriSema and amycretin, supply chain improvements resolving Wegovy shortages, and strategic acquisitions, including Catalent sites, which enhance production capacity and ensure long-term supply stability.

Overall, NVO ranks 7th on our list of best diabetes stocks to buy according to billionaires. While we acknowledge the potential of healthcare companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.