There is a bifurcation happening inside biopharma right now that most generalist investors are either ignoring or misreading. Two of the largest drug companies in the world — Gilead Sciences and AbbVie — are both growing revenue, both beating earnings, and both executing transitions that Wall Street keeps underestimating. They are also priced as though they are completely different businesses.
They are not. The gap between how the market values each one is the trade.
AbbVie’s Story Is Cleaner Than It Looks
AbbVie spent the last three years under a cloud. The Humira patent cliff was supposed to be a catastrophe. Biosimilar competition arrived, Humira revenues declined, and the stock spent much of 2024 and 2025 trading on fear rather than math.
The math is now doing the talking. In Q1 2026, AbbVie generated $15 billion in revenue, up 12.4% year over year, beating Wall Street estimates by $300 million. Adjusted EPS came in at $2.65, ahead of the $2.59 consensus. The company raised full-year 2026 adjusted EPS guidance to $14.08 to $14.28 per share and lifted revenue guidance to $67.3 billion.
The engine behind all of this: Skyrizi and Rinvoq. Skyrizi sales hit $4.48 billion in Q1, up 29.2% year over year. Rinvoq posted $2.12 billion, up 20.2%. Combined, these two drugs have already surpassed Humira’s peak sales and now control roughly 75% of new frontline inflammatory bowel disease patient starts. Management guided full-year combined revenues for the pair at over $31 billion, with more than 20% growth expected for 2026.
The transition that was supposed to break AbbVie is structurally complete. The market is catching up slowly.
Gilead’s Story Is More Complicated — and More Interesting
Gilead doesn’t get talked about the way AbbVie does. That’s exactly the point.
HSBC upgraded Gilead to Buy this week, raising its price target to $155 from $133. The firm said the market is too pessimistic on the HIV market following generic competition for older treatments. At 13 times next year’s earnings, the stock is cheap relative to the growth opportunities in front of it. The PEG ratio sits at 0.32 — a number that typically signals significant value relative to growth.
The Q1 2026 results support that framing. Product sales excluding the Veklury COVID treatment grew 8% year over year to $6.8 billion. HIV revenues grew 10%, driven by Biktarvy, which contributed $3.36 billion to the quarter and controls approximately 70% of U.S. HIV treatment market share. Exclusivity on Biktarvy runs to 2036, providing a decade of runway that requires no growth to fund the pipeline. It just needs to hold.
The newer launches are doing more than holding. Yeztugo, Gilead’s HIV prevention product, reached roughly 95% of U.S. patients and management raised full-year guidance for the product to approximately $1 billion. Trodelvy, the oncology ADC, posted Q1 sales of $402 million, up 37%, following its FDA approval for first-line triple-negative breast cancer treatment as both a standalone therapy and in combination with Keytruda for specific patients. The European Commission granted similar authorization in parallel.
Oncology is now the growth story layered on top of the defensive HIV base. Gilead acquired Arcellx earlier in the year to add the anito-cel CAR-T asset, which management believes could be the largest single growth driver in the oncology franchise’s history if commercialized into earlier treatment lines. More acquisitions in oncology are plausible before the year is out.
The Valuation Disconnect
Here is the part that doesn’t make intuitive sense. AbbVie is trading near $215, up sharply from its pandemic-era lows, with the market finally recognizing the Skyrizi and Rinvoq transition. That re-rating has already happened for ABBV. AbbVie’s forward multiple has expanded as the earnings inflection became undeniable.
Gilead, at 13 times forward earnings, hasn’t had that moment yet. The HIV generic fear created a discount that the underlying data doesn’t justify. Biktarvy doesn’t face generic competition until 2036. Long-acting HIV therapies like lenacapavir are improving adherence and expanding the addressable market. The oncology pivot is real and gaining clinical credibility with each approval.
Consensus is projecting 2027 free cash flow for Gilead around $13.3 billion as the acquisition charges tied to Arcellx and other deals roll off the income statement. At that normalized free cash flow number, the stock’s current multiple looks substantially cheaper than it appears today.
Which One Offers the Better Opportunity Right Now
AbbVie is the easier story. Cleaner transition. Bigger drugs growing faster. A full-year guidance raise that gives investors more confidence in the back half. The risk is that the easy money in the re-rating has been made, and the stock is now priced for continued execution rather than upside surprise.
Gilead is the harder story — but that difficulty is exactly where the opportunity lives. HSBC’s upgrade frames it well: the market is too pessimistic. A 13x forward earnings multiple on a company with a decade of HIV revenue protection, a growing oncology franchise, and a Q2 report coming in late July represents an asymmetric setup. The downside is already priced in. The upside — from Trodelvy’s label expansion, anito-cel’s commercial ramp, and the HIV prevention acceleration — is not.
Between the two, Gilead is the stock the market is underestimating today. AbbVie is the stock investors wish they had bought two years ago.
