GM. This is Milk Road AI, trying to figure out which AI stock will pay for our retirement.
The first AI winners built the infrastructure. Now our analysts think the opportunity is shifting to AI application names and one company is investing billions to stay ahead. Detailed breakdown on that company in today’s edition. 👇
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ELI LILLY IS MIRRORING THE GOOGLE PLAYBOOK 🪞
The first wave of the AI trade was about the buildout: chips, memory, power and data centers.
If you were early to names like Micron, Bloom Energy or Nebius, you did well.
But Vincent (our AI analyst at Milk Road) is now starting to shift his focus to AI applications like Eli Lilly (LLY).
Here's his thesis:
Right now, we’re building in a compute-scarce world. GPUs and memory are in short supply.
So the real question is: where will the world's best AI compute be deployed?
Vincent's answer is healthcare. And within healthcare, LLY is the name he thinks is most positioned to benefit.
First, the business today:
Eli Lilly is the largest pharma company in the world sitting at a $1T market cap with $65B in annual revenue. This figure is expected to grow to $83B in one year.
The market they're addressing is obesity and other weight-related diseases.
73% of U.S. adults are overweight or obese yet fewer than 5% of diagnosed patients are on GLP-1 drugs. The main problem is that GLP-1 is an injectable and nobody wants needles.
And that's why Eli Lilly created an oral pill version of GLP-1, sold under the brand name Foundayo. They also have two other products (Mounjaro and Zepbound) that are generating nearly $10B in free cash flow annually.
Its GLP-1 drugs are generating billions in cash but Vincent believes that's only half the story.
Vincent compares Eli Lilly to Google.
They already have cash from their legacy businesses and are now reinvesting it into AI:
- Built LillyPod, its own AI data center with 1,000+ NVIDIA GPUs.
- Launched TuneLab, an AI platform for drug discovery.
- Partnered with Google's Isomorphic Labs (Google's AI research division).
- Committed $75B to acquisitions and partnerships since 2023.
This is not a company dabbling in AI. This is a company using GLP-1 cash flow to build an AI infrastructure stack from the ground up.
Just like Google took ad revenue and deployed it into Waymo, DeepMind, and YouTube.
Eli Lilly is taking drug revenue and deploying it into data centers, models and biotech partnerships.
Along with Vincent, our CEO Kyle is bullish on Eli Lilly as well. LLY is currently trading at $1200 and he thinks it could go all the way to $5,000.
Want to see the rest of our analysts' highest-conviction AI picks?
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