Gilead’s HIV Business is Surging, but is the Company Too Dependent on One Franchise?

Gilead Sciences, Inc. (NASDAQ:GILD) delivered strong fiscal Q2 2026 results, with total revenue rising 10% year over year to approximately $7.8 billion. The performance was primarily driven by continued growth across its HIV franchise, including Biktarvy and the newly launched Yeztugo. Gilead also raised its full-year product-sales guidance following the quarter.

However, HIV products generated nearly three-quarters of quarterly product sales. While the company’s HIV business is showing promising growth, is Gilead Sciences, Inc. (NASDAQ:GILD) too dependent on one franchise?

Bull Case

One of the most prominent factors supporting higher revenue growth for Gilead (NASDAQ:GILD) was increased sales of its HIV products, Trodelvy® (sacituzumab govitecan-hziy) and Livdelzi® (seladelpar). HIV product sales rose 12% to $5.7 billion in Q2 2026 compared to the same period in 2025, driven primarily by higher average realized price and demand.

Descovy sales rose 48% to $967 million in the quarter compared to the same period in 2025, while Biktarvy sales increased 7% to $3.8 billion. The continued growth shows that Gilead’s (NASDAQ:GILD) established HIV business remains healthy rather than relying entirely on new launches. Yeztugo could create another major HIV franchise for the company, as it generated $232 million in Q2, a substantial increase from $15 million in the prior-year period. Yeztugo’s early uptake suggests that its twice-yearly dosing could expand Gilead’s (NASDAQ:GILD) prevention business rather than merely replace existing products. Nevertheless, it remains too early to determine the treatment’s long-term market share.

Furthermore, Gilead’s (NASDAQ:GILD) liver-disease portfolio demonstrates that growth is not completely confined to HIV, even though these businesses remain considerably smaller. The Liver Disease portfolio sales rose 10% to $877 million in Q2 2026 compared to the prior-year period, primarily reflecting higher demand for Livdelzi, along with chronic hepatitis B virus products and Hepcludex.

Bear Case

HIV products contributed approximately $5.7 billion of Gilead’s (NASDAQ:GILD) roughly $7.6 billion in quarterly product sales, meaning the franchise accounted for approximately three-quarters of total product sales. Strong HIV growth is currently an advantage, but the concentration creates long-term risk if competition, pricing pressure, or changes in prevention and treatment markets weaken the franchise.

Trodelvy performed well, but Gilead’s (NASDAQ:GILD) cell-therapy sales declined 14% to $417 million in the second quarter of 2026 compared to the same period in 2025, reflecting continued competitive pressure. This shows that the company’s broader oncology strategy has not yet produced consistent portfolio-wide growth.

Gilead (NASDAQ:GILD) also recorded a substantial quarterly loss of $11.2 billion because of acquired research and development expenses associated with transactions involving $7.0 billion for the Arcellx acquisition, $3.1 billion for the Tubulis acquisition, and $1.0 billion for the Ouro Medicines acquisition, net of the impact of the Lakefront collaboration. These charges do not indicate that Gilead’s (NASDAQ:GILD) established products became unprofitable. However, they demonstrate the considerable price the company is paying to build growth outside HIV, while the acquired assets still carry clinical and commercial risk.

What Do Hedge Funds Think?

Hedge fund sentiment provides additional context for Gilead’s (NASDAQ:GILD) investment case. According to Insider Monkey’s database of 1,022 hedge funds, the number of funds holding the stock increased from 71 in Q4 2025 to 77 in Q1 2026. The increase suggests that institutional sentiment became moderately more constructive, although it does not by itself establish a decisive shift in conviction.

Conclusion

Gilead’s (NASDAQ:GILD) investment case has strengthened as Biktarvy continues to grow and Yeztugo establishes itself as a potentially important HIV-prevention product. Trodelvy and the liver-disease portfolio provide additional sources of growth, while management’s guidance increase signals confidence in the underlying business.

However, the company remains heavily dependent on HIV, and its expensive effort to create a more diversified oncology portfolio has yet to demonstrate consistent commercial success. Gilead’s (NASDAQ:GILD) near-term outlook appears strong, but its longer-term rerating may depend on proving that it can build another major franchise outside HIV.

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Disclosure: None. This article is originally published at Insider Monkey.