Eli Lilly posted earnings this week that had Wall Street doing backflips. The pharmaceutical giant reported $7.54 per share versus the expected $6.67, and guided 2026 profit between $33.50 and $35 per share - above the consensus of $33.23. Shares jumped 7% in premarket trading.

The driver? Weight-loss drugs. Specifically Zepbound, which has helped push Lilly past the $1 trillion valuation mark last year, making it the first pharmaceutical company to hit that milestone. Demand is surging, telehealth channels are expanding, and cash-pay customers are flooding in.

But here's where it gets interesting. While Lilly is riding high, competitor Novo Nordisk just warned of "unprecedented" price pressures in 2026 and forecast a steep sales drop. Same market, same drug category, completely opposite outlooks.

So what's going on? The obesity drug market is massive and growing fast, but it's also getting crowded. Novo's warning suggests that pricing power is eroding as competition heats up. Lilly, meanwhile, is preparing to launch an oral weight-loss pill later this year, which could be a game-changer if it works as well as the injectables.

For retail investors, the question isn't whether obesity drugs are a big deal - they clearly are. The question is whether Lilly can maintain its momentum as competitors pile in and prices come under pressure. At a $1 trillion valuation, a lot of good news is already baked into the stock.

If you're thinking about buying, ask yourself this: Am I buying because the fundamentals justify the price, or because the stock went up 7% this morning? FOMO is a hell of a drug, but it's rarely a good investment strategy.

Lilly's execution has been impressive, no question. But when one competitor is soaring while another warns of a storm ahead, that's usually a signal to slow down and think carefully about valuation. The obesity drug market is real. Whether Lilly's current stock price reflects that reality or overshoots it is another question entirely.