+72%, +40%: How two AI-picked drugmakers beat and raised in one week

Big pharma has delivered two clean third-quarter reports in the space of a week. Merck (NYSE:MRK) beat estimates and raised its 2026 earnings outlook on October 29. Amgen (NASDAQ:AMGN) followed on Tuesday evening, lifting its full-year targets after the closing bell. Both are held by our AI models in the same strategy, and both are well ahead of where they were picked: Amgen at +71.82% since December 1, 2024, and Merck at +40.28% since January 1, 2026.

InvestingPro members, who access our monthly-updated AI picks for less than $8 a month, were already positioned in both large caps long before the reports. Across ProPicks, members have seen moves like these:

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The picks: Amgen (NASDAQ:AMGN) and Merck (NYSE:MRK)

Both sit in our Dominate the Dow strategy, which analyses all 30 Dow Jones stocks and selects the 10 strongest each month. The model added Amgen at $268.46 and Merck at $103.13, and kept both through every monthly rebalance since.

Amgen: guidance raised after the bell

Amgen reported third-quarter revenue of $10.37 billion, up 8% from a year earlier, with non-GAAP earnings per share of $6.45, up 14%. GAAP EPS was $7.08. It raised 2026 guidance: revenue now $38.9 billion to $39.7 billion (from $38.2 billion to $39.4 billion) and non-GAAP EPS $22.90 to $23.70 (from $22.30 to $23.50).

Growth came from the franchise breadth the model has tracked:

Free cash flow was $3.7 billion in the quarter and cash stood at $13.2 billion. The quarterly dividend is $2.52 per share, up 6%. The obesity drug MariTide is in Phase 3, with two more type 2 diabetes studies due to start in the fourth quarter.

Merck: a beat and a raise on Keytruda and Winrevair

Merck reported revenue of $18.1 billion against about $17.3 billion expected, and adjusted EPS of $2.49 against about $2.08 (LSEG consensus, per reports). Keytruda sales were $8.6 billion, up 6%, including $830 million from the subcutaneous Keytruda Qlex. Winrevair reached $694 million, up 94%, and Gardasil came in just under $2 billion, up 14%.

The company raised its 2026 adjusted EPS guidance to $2.77 to $2.82 from $2.66 to $2.76 and lifted the low end of its revenue range to $66.8 billion to $67.3 billion, from $66.3 billion. Reports noted that about $550 million of the quarter’s growth came from customers buying earlier than Merck expected, and that Keytruda faces loss of key patent protection from 2028.

What our models still see

Both reports point to the same pattern: broad product growth, raised guidance and strong cash generation, rather than reliance on a single drug. For Amgen, that is a portfolio where five products grew by more than 35%. For Merck, it is a vaccine and oncology franchise adding new growth as Keytruda matures.

The wider book

Dominate the Dow has returned +19.49% in calendar 2026, 11.83 percentage points ahead of the Dow Jones Industrial Average, and +70.05% since its October 2023 launch, 14.40 points ahead. Salesforce and Microsoft, both in the list above, sit in the same 10-stock portfolio. Each strategy holds its stocks at equal weight and rebalances every month, so no single position can grow beyond its slot.

How Investing.com’s AI-Powered Stock Picker Works

At the beginning of each month, our proprietary AI system evaluates thousands of global equities using a complex blend of historical data, valuation signals, and forward-looking growth metrics.

By processing more than 15 years of financial data across more than 150 quantitative models, the engine identifies up to 20 high-conviction stocks per strategy based on their projected medium-term upside potential.

Every month, these strategies undergo a strict rebalancing process. New opportunities are added, strong performers are retained, and stocks that no longer meet the criteria are removed.

To consistently track performance, each strategy utilises equal weighting across all selected stocks. While investors are free to adjust their own allocations, this structure provides a transparent benchmark for evaluating overall model performance.

The goal is to keep capital positioned in the companies showing the strongest combination of momentum, valuation, and business performance.

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*Live performance is recorded since our official launch of the Beat the S&P 500 strategy in October 2023.

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