Novo Nordisk Stock Takes a Dive—Here’s Why Traders Are Panicking

Pharma giant Novo Nordisk just got a reality check—shares tanked as investors bailed on weight-loss drug hype. Turns out, printing money from Ozempic prescriptions isn’t a forever play.

The sell-off: Shorts smell blood

Hedge funds piled into bearish positions after Q2 margins missed estimates. Street expected 65% gross margin—company delivered 62%. Cue the algorithmic carnage.

Pipeline problems brewing?

Rival Eli Lilly’s retatrutide Phase 3 data drops next week. If results crush Novo’s semaglutide on efficacy, say goodbye to that premium valuation.

Bottom line: The diabetes cash cow still grazes, but Wall Street’s already pricing perfection. One whiff of stagnation and suddenly everyone remembers pharma is a regulated oligopoly—not a tech growth story. P/E compression hurts, doesn’t it?

Still growing, but...

Novo Nordisk, famous for its Wegovy obesity drug (and its sibling, diabetes treatment Ozempic), unveiled its first half and second quarter of 2025 figures early Wednesday morning.

Image source: Getty Images.

For the quarter, the company booked 76.9 billion Danish kroner ($11.9 billion) in revenue, which was up only marginally on a sequential basis, and 13% higher compared to the same period of 2024. Net income, meanwhile, was down from the previous quarter but up from the year-ago quarter. It ROSE by 32% year over year to 26.5 billion kroner ($4.1 billion), or 5.96 kroner ($0.92) per share.

Both headline numbers missed the consensus analyst estimates, although not by much. Pundits tracking the company were modeling the equivalent of just under $12 billion for revenue, and $0.95 per share on the bottom line.

Although Novo Nordisk continues to post double-digit increases thanks largely to Wegovy and Ozempic, it has been in the investor doghouse so far this month. That's because at the end of July, it significantly cut its guidance for both total sales and operating profit.

Withering competition

Much of this has to do with the intense competition Novo Nordisk is facing due to the runaway success of those medications.

These days, pharmacy sector powerhouseis doing brisk business with a directly competing product, Zepbound, while third parties are copying Wegovy's semaglutide molecule for their own compounded products. The company announced no fewer than 14 new lawsuits on Tuesday, making a total of 146 across 40 U.S. states, to combat the latter.