This week, Novo hiked its sales and operating profit forecasts for this year, sending its shares up to 4.5% higher. The stock has gained 13% in the last four days, taking Novo’s market value to the equivalent of about $460bn, far ahead of Louis Vuitton’s $355bn.

That is less than six months after LVMH surpassed $500bn, becoming the first European company to do so.

While Novo has been boosted by market enthusiasm for its Ozempic and Wegovy injectables, drugs known as GLP-1s, Louis Vuitton has struggled amid worries over a slower recovery in the all-important Chinese market.

Novo shares have rallied over 50% this year, while Louis Vuitton has fully erased its gains from this year after this week posting slower sales growth as a post-pandemic boom in high-end goods.

Neil Campling, founding partner at Chameleon Global, said the diverging fortunes of the two companies partly reflects positioning, given the luxury sector’s popularity with fund managers.

“Louis Vuitton and luxury were the most overweight European sector at the start of the third quarter despite signs of consumer woe squeezing all across the landscape,” Mr Campling said in written comments.

While Novo and peer Eli Lilly’s pipeline of drugs to treat obesity is shaking up sectors from kidney dialysis to snack makers and retailers, Mr Campling sounded a note of caution given worries over pricing and supply glitches.

“GLP-1 is driving healthcare investment volatility like it is the new AI. With that comes risk and high expectations, ones that will need to be kept in check over the longer term,” he said.

Bloomberg