In short: Belski's biotech triangle, with Amgen and AbbVie. His framing is a flow-of-funds one: "there was so much market cap that left Pfizer, Merck, J&J, the traditional kind of the vaccines, and they went into biotech. So where'd they go? Went to Amgen, Gilead and AbbVie. And so Gilead with their new drugs and with their pipeline, with the balance sheet very strong."
Belski's argument here is about money moving rather than about the drugs themselves. Investors who wanted healthcare exposure used to own the traditional big pharma names — Pfizer, Merck, Johnson & Johnson. When those disappointed, that money went looking for growth and landed in biotech, and the three names it landed on were Amgen, Gilead and AbbVie.
What keeps Gilead there, in his view, is the combination of new drugs reaching the market, a pipeline behind them, and a strong balance sheet — meaning it can fund its own research and buy assets without needing anyone's permission.
In short: Held; sleeve position reaffirmed by inclusion, no new analysis. Named as the third leg of the healthcare build — INCY "is the continuation of the healthcare sleeve we started building with the inclusions of MDT and DGX in early June, as well as GILD a month ago" — under the sector view that "healthcare and biotech are entering (or are in) a bullish recovery mode that will continue for the foreseeable future." No price, rating change or fresh commentary on the name in this issue; see the 2026-AUG-07 POW! for the underlying thesis.
In short: Upgraded to overweight with a $155 target, and Sechan owns it — one of the "other two companies that we own that have great product pipelines too" alongside Lilly. It sits in the same consistency-of-earnings bucket: reasonable valuation, dependable earnings and a pipeline he expects to benefit from applying technology to drug development, in a sector he says the market under-recognized before it started re-rating.
Gilead is a large biopharmaceutical company, best known for its HIV and liver-disease treatments. It was upgraded to overweight with a $155 target and Rob Sechan owns it.
He does not make a drug-by-drug case; he makes a portfolio one. Gilead is in his book for the same three reasons as Lilly and AbbVie: earnings that arrive reliably quarter after quarter, a valuation that is not demanding, and a pipeline of products still to come. His view is that this combination was under-appreciated while investors were focused elsewhere, and is now being re-rated upward.
The general idea to take away: when a whole sector has been ignored, the useful screen is not "which company has the most exciting drug" but "which companies have dependable earnings at a price that assumes nothing good happens."
In short: Brian Belsky's final trade: "Gilead, GILD."
In short: The week's pick — "We recommend a Buy for Gilead Sciences (GILD)." At ~$133, 16% below the $157.29 52-week high (range $107.75–$157.29), "one of the more quietly compelling setups in large-cap biopharma… the reason it is under the radar is the same reason we find it attractive." The mispricing is an accounting artifact: the $10.5B Q2 GAAP net loss (Aug 4) is "almost entirely… acquisition-related charges… required to be expensed immediately under GAAP," so it is "an accounting event, not a business event" — but "that number will appear in every screener, valuation tool, and news headline… for the next several months." The operating reality from the same release: FY product-sales guidance raised to $30.1B, a 46.9% adjusted operating margin (Q1) implying ~$14B of annual adjusted operating income, and FCF estimated "north of $12.5B next year" — "a most alluring 7.6% FCF yield" on the $163B cap — against net debt of only ~$13.4B ($8.6B cash vs >$22B debt), i.e. "it could repay nearly all of its debt" in about a year of FCF. The engine is HIV: ~70% U.S. share on Biktarvy, "the world's most prescribed HIV regimen," protected through 2036 — "a license to print the cash that funds R&D, acquisitions, dividends, and buybacks for the better part of the next decade" — plus PrEP sales over $1B in Q2 (Yes2Go), the accepted Yeztugo weekly-oral-PrEP filing, and the positive ISLEND-1/2 readout at AIDS 2026 for a once-weekly oral pill developed with Merck. The transformation is Trodelvy (from the $21B Immunomedics deal): first-line approvals in metastatic triple-negative breast cancer (US + EU) and, with Keytruda, first-line metastatic lung — "these are not incremental label expansions," and "uptake in first-line indications historically bears little resemblance to the niche second-line volumes the bears are modeling." Valuation: 12-13× adjusted earnings vs peers and the S&P's 20×, a 2.5% dividend ($0.79/qtr), targets $120-$165 (avg ~$150) with Leerink at $127 vs Morgan Stanley at $165. Technically, after the spring-2024 two-year breakout it is "just as cheap now on a forward P/E basis as it was when it broke out" and is "resting on its 200-day moving average… the pause that refreshes." Risks conceded — IRA pricing on Biktarvy ("we'd be lying if we said it's completely bogus") and integration risk across Arcellx/Tubulis/Oral Medicines — but "the bears need to be right about both… simultaneously." Expected outcome: a re-rating to ~15-16× adjusted earnings.
Gilead is the company that dominates HIV medicine. Its main drug, Biktarvy, is the most-prescribed HIV treatment in the world and holds roughly 70% of the American market; its patents run to 2036. That is about as close as a drug company gets to a guaranteed income stream, and Hay's word for it is blunt: a licence to print the cash that pays for research, acquisitions, the dividend and the buyback for most of the next decade.
The reason the stock is cheap right now comes down to one misleading number. On August 4 Gilead reported a $10.5 billion loss. That sounds like a catastrophe, and it will show up in every stock screener and headline for months. But it is not money the business lost operating — it is the accounting treatment of companies Gilead bought. Under US accounting rules, when you buy a drug developer and pay upfront for its pipeline, you must write that cost off immediately, even though the drugs you bought will earn money for years. So the loss is a one-off bookkeeping charge for buying assets, not a sign the business went backwards.
What the business actually did in the very same quarter: it raised its full-year sales forecast to $30.1 billion. Its profit margin before those charges is 46.9%, one of the best in the industry, which works out to roughly $14 billion of real operating profit a year. Next year it expects to throw off more than $12.5 billion of free cash — cash left over after running and investing in the business. Against a company worth $163 billion, that is a 7.6% cash yield, which is high for a business of this quality. And it owes very little on a net basis: $8.6 billion of cash against $22 billion of debt, so about $13.4 billion net — one year of free cash flow would clear almost all of it.
The growth story is cancer. Trodelvy, a drug Gilead bought in 2020 for $21 billion (a price everyone called too high at the time), has just been approved as a first treatment — not a last resort — for the hardest-to-treat form of breast cancer in both the US and Europe, and for lung cancer in combination with Merck's Keytruda. That distinction matters more than it sounds: first-line means every newly diagnosed patient is a candidate, so the number of people treated is far larger than the "after everything else failed" market the sceptics have modelled. On the HIV side, a once-weekly pill developed with Merck worked in its final-stage trials, and prevention drugs (PrEP) passed $1 billion in sales in a single quarter for the first time.
The price: about 12-13 times earnings, against an S&P 500 at 20 times, with a 2.5% dividend while you wait. Technically the stock broke out of a two-year range in spring 2024, ran, and has now drifted back to its 200-day moving average — the rough average price of the past year, which Hay treats as the place to buy rather than chase. His phrase: "the pause that refreshes."
He does not dodge the risks. The first is that Medicare gets the power to negotiate Biktarvy's price before 2036, which would shrink the cash engine paying for everything else — he admits this one is real. The second is that the companies Gilead just bought (Arcellx, Tubulis, Oral Medicines) fail in the clinic, forcing more write-offs. His answer isn't that either is impossible; it's that the current share price only makes sense if both go wrong at the same time, and that's a lot to assume. If they don't, he expects the stock to re-rate to 15-16 times earnings once the ugly headline number rolls off and the cancer revenues start showing up quarter after quarter. Verdict: buy.
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Verbatim excerpts from the public transcripts (auto-pulled at each mention's timestamp, lightly cleaned). Timestamps link into the video; "source page" opens that commentator's full analysis at this row. Click a mention's header line to expand it (one open at a time). For personal study — not investment advice.