Amgen vs. Novo Nordisk: Which Healthcare Giant's Stock Is a Better Buy in 2026?

The pharmaceutical industry is evolving rapidly, leaving many investors to wonder whether established giants can sustain their momentum. Choosing between Amgen Inc. (NASDAQ:AMGN) and Novo Nordisk A/S (NYSE:NVO) requires weighing diverse pipelines against market-leading specialized treatments.

Amgen is a leader in biotechnology with a broad portfolio spanning inflammation and oncology, while Novo Nordisk focuses heavily on chronic diseases such as diabetes and obesity. They are often compared because they represent different approaches to the healthcare sector, offering investors varying levels of exposure to high-growth therapeutic areas versus diversified product lines.

The case for Amgen

In its latest annual report, filed for 2025, Amgen describes its position as a leader among biotech stocks. The company focuses on treatments for serious diseases within oncology, inflammation, and rare diseases. It relies on major distributors like McKesson Corp. (NYSE:MCK), Cencora Inc. (NYSE:COR), and Cardinal Health (NYSE:CAH), which together accounted for 77% of gross revenues in 2025. Customer concentration like this adds a layer of risk to the business.

In FY 2025, revenue reached about $36.7 billion, representing revenue growth of roughly 10% over the prior year. The company recorded net income of about $7.7 billion for the same period. This indicates a net margin of approximately 21%, reflecting the financial performance of its diverse drug portfolio across multiple global markets.

As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 6.3x, showing the company uses significant leverage. This metric, which measures total debt relative to shareholder equity, is offset by a current ratio of nearly 1.1x. For the full year, Amgen produced free cash flow of approximately $8.1 billion, which is the cash remaining after paying for capital expenditures.

The case for Novo Nordisk A/S

According to its latest annual report, filed for 2025, Novo Nordisk is a global specialist in chronic disease management. Its blockbuster treatments serve moe than 46.5 million people worldwide, marketing its diabetes and obesity products in approximately 170 countries. The company has recently expanded its research into cardiovascular health and emerging therapies to diversify beyond its core metabolic business.

For FY 2025, the company reported revenue of about $46.2 billion, achieving revenue growth of about 6.4%. Net income for the fiscal period reached roughly $15.3 billion, an impressive result for the global healthcare leader. This resulted in a net margin of approximately 33%, showcasing high profitability relative to its total sales volume.

As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 0.7x, indicating a conservative level of debt compared to its equity. The current ratio is approximately 0.8x, suggesting that short-term liabilities are slightly higher than liquid assets. During the same period, the firm generated free cash flow of about $4.3 billion, representing cash available after subtracting capital investments.

Risk profile comparison

Amgen faces substantial competitive threats from biosimilars as it loses patent protection for products like Prolia. Government price-setting under the Inflation Reduction Act also poses a threat to revenue from core products like Enbrel. Additionally, the company is involved in a tax dispute with the IRS and remains vulnerable to natural disasters that could impact its manufacturing sites.

Novo Nordisk A/S faces significant competition in the weight-loss market from Eli Lilly & Co. (NYSE:LLY), which has its own rapidly growing treatments. Regulatory scrutiny over the high cost of obesity drugs could lead to mandatory price reductions or restricted insurance coverage. Furthermore, any disruption in its complex global supply chain could limit its ability to meet the high demand for its injectable therapies.

Valuation comparison

Novo Nordisk A/S appears more affordable than Amgen based on its Forward P/E and P/S ratio, despite Amgen's higher revenue growth. The latter ratio measures price relative to sales over the past 12 months.

Valuation metrics include those sourced from Financial Modeling Prep (FMP) and may differ from those of other data providers.

Which stock would I buy in 2026?

Novo Nordisk has the blockbuster drugs Wegovy and Ozempic (the same drug marketed for different purposes), but faces investor doubts about its market position given a deal with the federal government to lower prices for the GLP-1s, the emergence of generic competitors, and the apparent advances by Eli Lilly in developing weight loss drugs expected to be superior to Novo's offerings.

Still, the introduction of the once-a-day Wegovy pill in the U.S. has been a resounding success, and the business has a patent on injectable Ozempic/Wegovy till 2032, providing it some competitive moat. Yet, Wall Street sees sales declining by about 3% in fiscal 2026, with net income contracting by 4% as pricing pressures erode margins slightly. Long-term, analysts expect the company to reverse the 2026 decline and start growing again as new products come online.

Amgen is not a fast-growing company by sales, but, given its scale, it should be able to achieve a roughly 3% revenue increase in 2026, to around $37.8 billion. But size forgives a lot in pharmaceuticals. For one, its billions in net income could enable Amgen to pursue future growth by acquiring other drugmakers. The business also has six drug franchises that generate $1 billion-plus in annual revenue. There is real value there.

Late last year, Amgen became one of nine companies to reach a deal with the U.S. government to lower drug prices (Bristol Myers Squibb (NYSE:BMY), Merck & Co. (NYSE:MRK), and Gilead Sciences Inc. (NASDAQ:GILD) are also among the companies that signed a deal). Based on this agreement, Amgen will be exempt from Trump's pharmaceutical tariffs for three years, a positive, in exchange for the company reducing prices on its key migraine drug Aimovig and rheumatoid arthritis medicine Amjevita by about 60% and 80%, respectively, in a direct-to-consumer platform launched this month.

This isn't an easy choice: Novo Nordisk created the blockbuster GLP-1 market and was rewarded for it, but is now suffering from the emergence of competing treatments from many corners of the pharma sector. Its cheaper ratios make it a tempting rebound candidate, but generally it's better to pull the trigger on a business that is increasing revenue, even if it's on the slower side, as with Amgen. Novo may rebound one day, but for now Amgen is the pharma stock to bet on in 2026.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amgen, Bristol Myers Squibb, Eli Lilly, Gilead Sciences, Merck, and Novo Nordisk. The Motley Fool recommends McKesson. The Motley Fool has a disclosure policy.