Pharma & Biotech has the "Magnificent One"

The Magnificent 7 stocks (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla) currently make up a disproportionate share of the S&P 500's total market capitalization (around 36% as of late 2025). Excluding these tech companies, the "S&P 493" (the other 493 companies in the index) has shown signs of weakness, with lower or even negative projected earnings growth in various periods. This divergence contributes to a "K-shaped" economy, where a narrow segment thrives, while others face stagnation or decline. The idea of a "recession without the Magnificent 7" suggests that a significant portion of Corporate America could already be in a downturn, although that's difficult to prove due to the myriad interconnections between companies.

But a conversation with Steven Paul during the holidays spurred me to visualize the evolution of the top 20 pharmaceutical companies globally by market cap over the last 15 years to test the idea that, perhaps, there is an equivalent in the pharma and biotech industry. The aggregate market capitalization of the top 20 pharma and biotech companies has been growing for the last 15 years, but remove the top 5 companies from the mix (Eli Lilly, J&J, AbbVie, Roche and Astra Zeneca) and you see a "recession" in 2025.

But there is a clearly a "Magnificent One": remove just Dave Ricks's Eli Lilly and Company and you can see stagnation for the rest of the pack in the last 3 years. To understand the true, explosive magnificence of the stock (the company itself is pretty amazing), I added a simple comparison of the top 20 stocks.