Artificial intelligence stocks have been the market’s biggest story, with triple- and quadruple-digit gains leading the S&P 500 higher and drawing investors into the next great tech growth narrative. But this year, AI is not the only growth story. Investors have expanded into other industries in search of new opportunities — and the stock that has rewarded them most is a biotech, not a chipmaker.
Moderna (NASDAQ: MRNA) has surged more than 600% this year, far outpacing AI darlings such as Nvidia, Micron Technology and Sandisk, along with many other top-performing AI stocks. Just days ago, the company joined the Nasdaq-100, the index that tracks the largest non-financial companies on the Nasdaq.
The rally is the latest turn in a stock that has known both extremes. During the pandemic, Moderna took its coronavirus vaccine from the drawing board to commercialization in less than a year. The shot, the company’s first commercial product, became a blockbuster, generating more than $18 billion in revenue at its 2022 peak and helping push shares up more than 2,000% over about a year and a half. The good times then gave way to significant headwinds: vaccine demand declined as the pandemic eased, its respiratory syncytial virus (RSV) vaccine struggled to gain market share, and its much-anticipated cytomegalovirus (CMV) vaccine candidate failed in a phase 3 study.
Moderna has since progressively turned things around. It cut costs to align with the current coronavirus vaccine market, won approval of new products including a flu vaccine and updated coronavirus vaccines, and shifted its pipeline’s focus to oncology and rare diseases while maintaining a presence in respiratory illnesses. This year, progress in oncology has been a key catalyst for the stock. The company is advancing intismeran autogene, a personalized cancer vaccine, across 10 clinical studies, with the most advanced in phase 3. In August, Moderna said intismeran autogene, in combination with Merck’s Keytruda, met its goals of recurrence-free survival and survival without the spread of disease to distant organs in patients with melanoma. The companies said they would “engage with regulators on filing submissions,” suggesting a new product approval may be on the horizon.
Moderna was already up about 100% this year before that announcement, and the stock has soared further since. Trading at around $225, it now surpasses the average 12-month Wall Street price target of $122.
So is it too late to buy? Moderna looks well positioned for the road ahead: new products are generating revenue, and a late-stage pipeline should deliver fresh revenue streams. It is no longer just a coronavirus vaccine company, but is transforming into a larger biotech capable of addressing a broad range of treatment areas. That makes it a stock worth owning with plenty of room to run as promising pipeline candidates win approval. That said, given this year’s massive gain, investors would be wise to watch closely and wait for an opportunity to buy.
