Gilead Stock Is Closing In on an All-Time High. The Case for More Upside.

Gilead Sciences stock is closing in on a record high. (Justin Sullivan/Getty Images)

Veteran biotech investors may recall the “Four Horsemen” of the megacap space, but in the years since, only one has truly stood the test of time. While Celgene was absorbed by Bristol Myers in early 2019, Gilead Sciences has emerged as the enduring standout among the remaining trio. A look at the comparison chart below versus Amgen and Biogen reveals a stark divergence in performance over the past year. Gilead has surged 59% and offers a healthy 2.6% dividend yield, while Amgen and Biogen have declined 11% and 16%, respectively. In markets, momentum tends to persist rather than reverse, and this leadership trend looks set to continue.

Gilead Sciences delivered a breakout performance Friday, surging 8.3% to $119.41 in its strongest single-day gain in nearly three years on the back of a well received earnings reaction. The rally pushed the stock within striking distance of its all-time high of $122.61 set back in June 2015.

The long-term chart paints a compelling technical picture, showcasing a massive cup-with-handle base that’s been nearly a decade in the making. Notably, the handle began to form right around the very round $100 level. As the saying goes, “the longer the base, the higher in space,” and with this breakout gaining traction, Gilead could be on track to reach $180 by mid- to late 2026.

Gilead Sciences’ one-year chart reveals a touch of hesitation near the round $120 level, where a sharp reversal on March 10 led to a 22% drawdown. But bulls stepped in forcefully near $100 in April and May, an area that had acted as resistance last November and again in April, turning it into a solid floor. We wrote about this name last month and continue to believe this will march higher.

Friday’s breakout above a cup-with-handle trigger at $117.70 reignited momentum, and the stock finished Friday at a 52-week high. That stands in stark contrast to the iShares Biotech ETF (IBB), which still lags 13% below its own annual peak.

Gilead has been a pillar of relative strength, notably avoiding any losing streak longer than two weeks over the past 15 months, a rarity in the biotech space.

One other emerging leader in biotech is the weekly chart below of Incyte. The therapeutics stock is up 31% over the last three months and looks poised for more.

It is demonstrating solid relative strength this week up 4% as the SPDR S&P Biotech ETF (XBI) dropped 1%, and the gain came after the stock rose 7.7% the week before.

This week broke above a double bottom pivot of 77.06 in a nine month base and could target the very round par number by year-end.

Incyte was trading at $78.75 Friday.

There’s life in some biotech stocks yet.

Write to Doug Busch at douglas.busch@barrons.com