We get so caught up in the buzz and the sizzle that we forget about the steak, especially in this era of GLP-1s, which have revolutionized the treatment of diabetes and obesity and are being studied for so many more diseases and conditions. That’s my chief takeaway from meeting with 15 different CEOs, a dozen of whom were off the record, at the 44th annual JPMorgan Healthcare Conference, which is perhaps the most important and certainly the largest of any industry confab. The steak, in this case, is the actual company as represented by the price-to-earnings multiple. The sizzle is the excitement about the hunt for the next big blockbuster, and the only one that anyone sees on the horizon is another iteration of the GLP-1 drugs because they will be the biggest class of drugs there is. Maybe ever. Before I go into some of the individual insights I have, I want to tell you a little bit about this event, which I have been coming to for about 10 years. First, it is incredibly well run, and most drug companies, big and small, want to present. There are presentations all over the place, and you can choose to go to big or small presentations, both public and private. The halls in the The Westin St. Francis Hotel in San Francisco, where it was held, were totally jam-packed. It’s often difficult to get from one place to another; it is so darned crowded, and I got the feeling that it was dramatically more swamped than at any time this decade. There is a rhythm to this conference. The presenters aren’t there just to present; they are looking for companies to buy. The audience isn’t there just to listen; they are looking to sell their companies or raise money. The give and take is legendary, and there have been some very big deals that both began there and closed there. The whole process was interrupted by the Federal Trade Commission (FTC) under the Biden administration, which made it very clear that it frowned upon the process of Big Pharma buying small pharma firms. It hammered Amgen when it tried to buy Horizon Pharma, an orphan drug company, blasting Amgen for wanting to use its market power to force different managed care companies to pay for drugs it might not have wanted to pay for. Amgen immediately agreed to do pretty much whatever the FTC wanted, but that meant nothing to the then-head of the FTC, Lina Khan. She didn’t seem to like the model of the big companies buying smaller ones to bolster their pipelines. It is a rare company that can continue to produce hit after hit solely from its own labs. So, they are almost always on the lookout for something early and are often willing to overpay for it to be sure that another pharma company doesn’t get it. That process has driven much of the investment in health-care companies over the past decades. It has sustained the biotech industry. It has been responsible for a huge number of blockbuster drugs, drugs that would never have reached the market if it weren’t for a buyout by a deep-pocketed partner. I won’t mince words; Khan crushed this part of the industry, and attendance at the conference had been way down. It’s hard to believe how harmful Khan was to the whole pharma food chain. I really don’t care if you are a Republican or a Democrat. She stifled the whole process. She hurt the venture capital market because the initial public offering (IPO) door slammed shut. There was no funding window. She even hurt the stock of Club name Danaher , which saw a huge decline in what had been the natural buyer from young companies that needed equipment to demonstrate their ideas and run trials. The people who run Danaher are not dumb; they are smart people who could no longer trust the number of clients they might have. Amazingly, after one laissez-faire year of regulation under the Trump administration, the money has sprung back to life — and the deals, mostly small ones this year, are back. They look the same as they did pre-Biden. I don’t talk politics with people when I am working, but the irony was not lost on me. This was a lefty group six years ago. Many still despise the president. But many just can’t get over how they felt demonized, and they are now anxious as a class to get back to the way it was, and they thank President Donald Trump for the return of capitalism as they knew it. The pharma group itself used to have a premium multiple, as did all of health care. A lot of that was because many of these stocks had consistent long-term growth. Pharma, in particular, has almost always occupied some of the space that tech does now. The combination of the “Magnificent Seven” and the hyperscaler food-chain, coupled with patent cliffs that couldn’t be papered over by acquisitions, caused the multiple of this group to shrink and helped inflate the tech stocks, perhaps playing a role in what is thought to be a bubble top. I have argued that’s not the case. I do not doubt, however, that tech has hit some sort of a wall, one that was first articulated by the great Michael Cembalest in the JP Morgan strategist’s now legendary first opus of the year, where he talked about power gating. The hyperscalers haven’t run out of money. They have run out of power. They can’t build out the data center network without more cheap power, and it doesn’t exist unless you want to use clean coal. Most of the execs in the business think that’s an oxymoron. You can’t get new natural gas turbines until 2030, even as some ill-advised analyst had the guts/stupidity to say that GE Vernova may have an oversupply problem. If only that were the case. It’s the power shortage that has created the elusive/illusory nuclear power gameplan. Has it not dawned that the most aggressive of the hyperscalers, Microsoft and Meta Platforms, have been adamant about building new nukes? Does it shock you that throughout all of this talk, there is really no action? Yes, the Trump administration is filled with pro-nuke folks who make common cause with the hyperscaler execs. But tell that to the phalanx of local and national entities — from community boards to the Nuclear Regulatory Commission — that don’t share their predilections. Yes, I love a good small modular nuclear reactor, and I am incredibly pro-nuke, have been ever since I wrote a piece for Rolling Stone in 1979 debunking the clamshell movement, one that got spiked, but at least they paid me a kill fee. No, it’s not because I don’t like nuclear power, although Fukushima tested the love for this high-wire technology. I am just realistic that if you are banking your future on opening a de-commissioned nuke plant when de-commissioning means permanently destroying it, you have another thing coming, especially when its name used to be Three Mile Island. Yes, you can help lay off the cost on private equity. You can try to get a ton of Saudi money to help, which is what you are trying to get when you install Dina Powell McCormick as president, which Meta Platforms did this past week. She was key to Goldman Sachs’ sovereign fund initiative and an advisor in the first Trump administration. But the bottom line is the power gate is real, and the gate has capped the multiple for the big guys. I think it should be the other way. If these companies were to spend less because they can’t get cheap power quickly, they would be more highly valued. Nobody likes the stocks of companies that keep raising their capital expenditure budgets. But these companies have become spendaholics, nothing caps your multiple like a drunken sailor spending. Sure, that has sent a lot of tech money to chase the shortage trade, NAND flash memory, DRAM (dynamic random access memory), and the like, and that hasn’t stopped. The huge gains we just saw in Intel and Advanced Micro Devices — but not Nvidia — have to do with putting more servers into the data centers. That’s for CPUs (central processing units), not GPUs (graphics processing units), at least for now. That’s not Nvidia’s bailiwick. The palpable aversion to what has become the enterprise software leper colony doesn’t help tech’s case either. The shedding of billions of dollars in value from Adobe , Salesforce , and even the sainted ServiceNow , makes the once loved SaaS (software as a service) model totally un-investable, and I am not even talking about all the little doodad companies like Atlassian and Datadog , which the analysts don’t want to leave because it might take away their wellbeing. Of course, the hilarious thing about the leper colony nomenclature is that it hasn’t been all that impacted; it’s the “M” that’s come down in the earnings estimates times multiple equals price equation. Which is a long-winded way to say that tech money isn’t just going to go to the sidelines, and money managers aren’t going to let it be incinerated in tech, and it can’t all be put into Google-parent Alphabet , although it sure seems like it. So where does it go? Don’t worry, I am not going to change my mind and go away from tech. That would be stupid. There’s still plenty of growth in the ones we own, even as Nvidia shares have only just turned positive for 2026 in Thursday’s bounce. So, why not abandon it? It’s because of one of the most remarkable nights that I can recall from my trip to the JPMorgan Healthcare Conference in San Francisco this week. I am not going to walk away from Apple . Unlike the companies that spent trillions in the great American electric koolaid build out, Apple let others do it for them and then reaped the benefits. I know, I wanted Apple to get paid by Alphabet for Siri being augmented by Gemini, and I still think there might be an exchange. The fact is, though, that Apple won. No wonder it has such a high multiple. It doesn’t have to pay fellow Club name Nvidia, and it isn’t trying to build a nuclear power plant with some outfit named Oklo . Apple does not need to know what a small nuclear reactor is, let alone how long it will take to build one. Nvidia CEO Jensen Huang sat down with Eli Lilly CEO David Ricks on Monday night to talk about a new joint venture they have that could instill rigor where there is none right now. Jensen wants to put his technology to work solving the intricate ways that the human body goes awry. Jensen has been drawn to the science of drugs as he has been drawn to the science of space, self-driving, accelerated computing, and generative artificial intelligence — you name it. He said at the fireside chat with Ricks that there is not enough of the kind of engineering that Jensen brings to the table in pharma. He thinks that his platform is uniquely created to quicken reasoning and come up with more keys to unlock more locks in the human body. I have a stock bias when it comes to both of these gentlemen. You know I like Lilly and have all of the way because of my belief in the GLP-1 wonder drugs, which are only being used for diabetes management and weight loss for now. They are being tested for every other condition under the sun. Jensen, I believe, thinks that there are other GLP-1s out there waiting to be discovered and that the medical field is ridiculously hit or miss. He also knows that the pharma execs want desperately to use artificial intelligence and not just talk about it, something that Regeneron CEO Len Schleifer made clear is the case for most of pharma. What kind of world does Jensen want to see? Again, I can’t put words into his mouth — but if I were to sum up a hypothesis after listening to his side of the fireside chat, he wants not only to think about what are all of the uses of a GLP-1 class, he also wants to be able to ask a super computer to scrutinize all of the literature involving Amyotrophic Lateral Sclerosis (ALS), also known as Lou Gehrig’s disease, and solve it. I think Jensen is on to something, as always. The GLP-1 class of drugs is going to be the biggest class of drugs ever, and it’s currently only being reflected in the price-to-earnings multiple and market cap of Eli Lilly. The miscues made by Novo Nordisk make people queasy about buying it for the head start it has in the pill form. We are all expecting Lilly to get approval for its pill form this spring, and it is going to bring in tens of billions of dollars as a once-a-day pill beats a once-a-week injection any day of the week itself. I worry about a first-mover advantage for Novo Nordisk, whose Ozempic has become the “Kleenex” of GLP-1s, but Ricks at Lilly did not, when I asked him. Perhaps it’s because Lilly has spent billions on building out a network of manufacturing plants to meet worldwide demand, as it should, because the indications here are myriad. Look for readouts on hypertension and on Alzheimer’s, and on smoking, opioids, alcohol, and even gambling. Rick did say that workaholics would be spared. Who knew GLP-1s were Puritan? Because it is such a huge market, there is more than enough room to go around. Consider the low-multiple drug companies like Regeneron and Amgen, the ones that used to be high -multiple but have lacked blockbusters. Now they will have one. I know there were plenty of gripes about how Amgen didn’t have enough data to demonstrate that its Maritime formulation is going to be able to take the world by storm. But a once-a-month injection or even once a quarter might be preferred by some to a pill. Or how about Regeneron’s combination that allows it to lower cholesterol while at the same time do all of the other good things that the GLP-1s can do. I wouldn’t be so high on Amgen if I didn’t think that the new Repatha studies show that if you want to cut the risk of a heart attack, you should be on this drug that used to cost thousands of dollars but now costs a handful of dollars. Repatha was originally meant for lowering cholesterol. Mine is not at a dangerous level, but I am allergic to statins, so I take it every other week. Doesn’t seem to be too much to ask to have lower cholesterol of the bad kind and also cut down the risk of a heart attack. I also know that there’s work being done on dementia and the drug, but it seems to be a bit of an underground effort. Regeneron is right because its Eyela macular degeneration drug is still going strong, as it is Dupixent, a miracle drug with eight different indications, including moderate to severe asthma and eczema, and Libtayo, a treatment for non-melanoma skin cancer, which seems to be in epidemic proportions. There’s plenty to like away from Regeneron, Lilly, and Amgen. Novartis ‘ Vas Narasimhan is the rare CEO who is a doctor, a spokesperson for public health, and a real businessperson who understands cash flow. That’s why Novartis continues to outperform the group and is second only to Eli Lilly when it comes to performance. The stock is inexpensive with a high teens P/E and a 3% yield and a pipeline that has bridged patent cliff after patent cliff, and Narasimhan thinks could continue to do so well into the 2030s. He’s got a mosaic of drugs that grow well, and there are so many different initiatives—and acquisitions—that he has defied the loss of exclusivity nightmare that is Pfizer. There’s also Johnson & Johnson , which has become the Alphabet of the group on the strength of its anti-cancer, ophthalmological, and immunological franchises and on the recognition that its orthopedic business — fixing knees and hips — are too commoditized and should be departed from. It’s not all pharma. Take a look at Cardinal Health as it takes on rationalizing and helping chains of companies that own doctor groups. It was one of three middlemen, along with McKesson and Cencora , but it is now more of a solutions company for these doctor groups, where the doctors get to be doctors, and Cardinal takes care of all the rest. It was the biggest company to preannounce at the conference. What makes me think that the group will get a higher multiple besides its consistency and the sudden inconsistency of power-gated tech? Simple: politics. As recently as last April, Narasimhan told analysts on a conference call that Most Favored Nation pricing would be devastating for America, where drug companies had been coddled. Biden’s Inflation Reduction Act was the first to crack the pharma shield, but Trump has never been a big fan of big pharma, and he’s come in with guns blazing. Turns out the guns were rifles, the shots were taken, and they failed to hurt the earnings or the estimates. The group still seems to be under a political cloud. But I spent some serious time looking for political holes in the numbers for a dozen companies and didn’t come up with any. Bottom line I came back from the West Coast thinking that, ahead of this coming week’s Investing Club Monthly meeting, it might be worth it to figure out which of these needs to be added to the fund. We are in Bristol Myers Squibb , which has become an afterthought until we see something major from Cobenfy. It’s a small position. We may just have to trade it for a big position in Amgen or Regeneron or Novartis. I failed to get J & J back in after my aborted mission, fearing talc suits. I no longer fear them because this administration and this Supreme Court are not going to dismantle J & J on an altar of junk science, even as 80,000 plaintiffs think it’s not. J & J won that battle, or the stock wouldn’t have just roared almost 50 straight points. Yep, my trip out west and my endless interviews have brought one thing front and center: health care is going to resume its rightful place in big-time managers’ portfolios, and that place will be funded by donations from the brutal war over who can claim to have spent the most to lose the least money on artificial intelligence. (Jim Cramer’s Charitable Trust is long DHR, GEV, META, NVDA, GOOGL, CRM, AAPL, BMY, LLY. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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