Merck, Elanco, Myriad Genetics, Neogen, and Cigna Shares Are Soaring, What You Need To Know

What Happened?

A number of stocks jumped in the afternoon session after the market experienced a sharp sector rotation, as investors fled growth-oriented technology stocks and piled into value-oriented names amid growing valuation concerns. This divergence was stark: the tech-heavy Nasdaq struggled, losing 0.2%, while the Dow rallied. This shift away from tech was triggered by a series of negative catalysts in the AI sector. AI cloud provider CoreWeave slid on disappointing guidance, while chip darling Nvidia pulled back after SoftBank sold its stake. This "hurt the AI trade," dragging down related names like Micron and Oracle. As capital left tech, it sought safety in "higher quality" defensive names. Health care giants like Merck, Amgen, and Johnson & Johnson saw significant buying, boosting the Dow.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Branded Pharmaceuticals company Merck (NYSE:MRK) jumped 4.5%. Is now the time to buy Merck? Access our full analysis report here, it’s free for active Edge members.
• Specialty Pharmaceuticals company Elanco (NYSE:ELAN) jumped 2.8%. Is now the time to buy Elanco? Access our full analysis report here, it’s free for active Edge members.
• Therapeutics company Myriad Genetics (NASDAQ:MYGN) jumped 3%. Is now the time to buy Myriad Genetics? Access our full analysis report here, it’s free for active Edge members.
• Medical Devices & Supplies - Diversified company Neogen (NASDAQ:NEOG) jumped 3.4%. Is now the time to buy Neogen? Access our full analysis report here, it’s free for active Edge members.
• Health Insurance Providers company Cigna (NYSE:CI) jumped 4.2%. Is now the time to buy Cigna? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Merck (MRK)

Merck’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 9 months ago when the stock dropped 11% on the news that the company reported mixed fourth-quarter earnings. Its full-year revenue and EPS guidance missed by a long shot. The company blamed some of the softness on rising competition and weak demand in China. On the other hand, Merck blew past analysts' constant currency revenue expectations this quarter, and its EPS outperformed Wall Street's estimates. Overall, this was a softer quarter.

Merck is down 8.3% since the beginning of the year, and at $90.96 per share, it is trading 12.4% below its 52-week high of $103.79 from December 2024. Investors who bought $1,000 worth of Merck’s shares 5 years ago would now be looking at an investment worth $1,122.

P.S. In tech investing, "Gorillas" are the rare companies that dominate their markets—like Microsoft and Apple did decades ago. Today, the next Gorilla is emerging in AI-powered enterprise software. Access the ticker here in our special report.