The divide between Eli Lilly and Novo Nordisk is widening after their latest earnings

Both Eli Lilly and Novo Nordisk beat second-quarter estimates and raised their full-year outlooks. But while investors cheered Lilly's results, sending shares higher on Wednesday, they punished Novo a day earlier — underscoring a growing divide in Wall Street's confidence in the two obesity drug leaders.

As Lilly continues to exceed expectations and widen its edge in the obesity drug space, Novo is still racing to win back market share, restore investor confidence in its pipeline and chart a clear path toward long-term growth.

"While Novo raised guidance (as expected), the pipeline and path to sustainable growth remain less clear," BMO Capital Markets analyst Evan Seigerman said in a research note on Wednesday.

At stake is a global market that some analysts expect to be worth more than $100 billion by the 2030s. In the U.S., Lilly held a 60.9% share of the obesity and diabetes drug market in the second quarter, compared with Novo's 38.8%, according to Lilly's earnings presentation Wednesday.

Lilly reported another quarter of blistering growth, with resilient demand for its blockbuster diabetes treatment Mounjaro and obesity drug Zepbound pushing revenue up 48% from a year ago. The company also hiked its full-year revenue guidance, reinforcing investor confidence that its treatments can sustain their sales momentum despite lower prices in the U.S. — an issue that Novo is also facing.

"The print reinforces our view that Lilly remains best positioned to capture the majority of global incretin market growth," Bernstein analyst Courtney Breen said in a note on Wednesday, referring to the obesity and diabetes drug space.

Novo also topped Wall Street's expectations and lifted its full-year outlook Tuesday, citing "increased expectations" for GLP-1 product sales.

Analysts said Novo benefited from rebate adjustments and other temporary factors during the quarter. Sales of the company's diabetes drug Ozempic and overall obesity portfolio exceeded analyst estimates for the quarter, according to StreetAccount.

But investors appeared less focused on what Novo delivered this quarter and more on concerns about what comes next.

"All in all this leaves many questions open for 2027," said Jefferies analyst Michael Leuchten in a research note on Tuesday.

Revenue of Novo's closely watched Wegovy pill came in slightly below analyst expectations. That disappointed some investors and raised questions about whether it can become a big enough growth driver for the company.

"Wegovy Pill launch has shown promise, but 2Q results in the US highlight that more needs to be done to satisfy investors and truly beat expectations," Seigerman said.