Eli Lilly, Apple and Salesforce each made news on Thursday — our Club takes

Published Thu, Mar 9 20235:11 PM EST

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

A trio of Club stocks — Eli Lilly (LLY), Apple (AAPL) and Salesforce (CRM) — are in the news Thursday. Here is a breakdown of the headlines and how they impact our outlooks for each company. LLY 1Y mountain Eli Lilly's stock performance over the past 12 months. The news: Eli Lilly is ending clinical development for one of its older Alzheimer's drugs — known as solanezumab — following another failed trial. This announcement does not impact the company's work on donanemab and remternetug, two other experimental Alzheimer's treatments that use a different approach than solanezumab to try to slow the disease's progression. Donanemab and remternetug also are generally seen as more promising than solanezumab, which has been involved in multiple unsuccessful large-scale clinical trials over the past decade. In this latest failed study , Eli Lilly examined whether solanezumab could effectively slow cognitive decline in participants who were in the preclinical stage of Alzheimer's — meaning, they still had normal thinking and memory function but their brains showed signs of an abnormal protein plaque that's linked to the disease. Solanezumab ultimately did not slow down Alzheimer's progression in these patients compared with placebo groups. Club take: While the initial headlines may seem troublesome, this unsuccessful solanezumab trial does not change our view on Eli Lilly's business overall or its Alzheimer's pursuits more specifically. Eli Lilly has the best growth prospects of any large-cap pharmaceutical company, driven in large by part its type 2 diabetes drug , Mounjaro, that is expected to soon receive additional approval to treat obesity. Eli Lilly's Alzheimer's pursuits are not central to our investment in the company . Of course, we would welcome success in those efforts, but solanezumab hasn't been expected to deliver it. Rather, Eli Lilly's best chance of success in the very near term is donanemab. Results from a late-stage trial assessing donanemab's efficacy is expected in the coming months. Eli Lilly shares have struggled so far this year, falling more than 13%. But with our confidence in Lilly's prospects intact, that weakness has made the stock more attractive — a point JPMorgan analysts also made Thursday. In a note to clients, the firm said Eli Lilly "remains one of our favorite names" in the industry. We agree. AAPL 1Y mountain Apple's stock performance over the past 12 months. The news: A reported change to Apple's international sales business underscores the company's efforts to grow in India. According to Bloomberg News , which cited people with knowledge of the matter, Apple is making India its own sales region for the first time and promoting Ashish Chowdhary, the executive who leads sales in the country. Following the change, Chowdhary will report directly to the iPhone maker's head of product sales, Michael Fenger, according to Bloomberg. "India is hugely exciting market for us and is a major focus," Apple CEO Tim Cook said on the company's latest earnings call last month . In the quarter Dec. 31, Cook said Apple tallied record revenues in India as sales grew double digits year over year. He also said Apple is applying lessons it learned from growing in China. Club take: Jim Cramer has said that investors should pay more attention to the growth opportunity in India. It's therefore encouraging that Apple is leaning into its recent strength there, one of the world's largest smartphone markets. Apple has sold iPhones in the country for many years, but historically their expensive price tag limited the company's ability to gain meaningful market share . Progress is clearly being made, and there's ample room for growth ahead, too. Additionally, as Evercore ISI analysts noted Thursday, Apple's expanding manufacturing presence in India helps the company avoid some smartphone tariffs imposed by the government. In general, emerging markets like India are important to Apple's hardware growth strategy. As Apple sells more devices that bring new customers into its ecosystem, that means there's a larger pool of users to subscribe to its services. And growth of Apple's service revenue stream helps propel the company's value higher. Apple remains a stock to own for the long haul. CRM 1Y mountain Salesforce's stock performance over the past 12 months. The news: Salesforce hasn't decided on the pricing for its new generative artificial intelligence product, known as Einstein GPT, executive Clara Shih told CNBC on Thursday. However, Shih argued that the corporate use case for the tech product is clear and will boost productivity for customers once it rolls out more broadly. While there's a lot of hype surrounding generative AI right now, Shih said Salesforce is approaching it in a way that's "rooted in business outcomes." "We're not talking about writing funny poems," Shih said. "We're talking about writing sales emails and customer service responses that agents can send to get back to customers faster, and doing it in a way that's trusted and secure with our customers' data." Companies don't necessarily want their employees using a consumer-focused chatbot like ChatGPT because those queries may contain important, proprietary information, Shih said. But she said Saleseforce's customers trust the company with their data today, which has created excitement around the role for Einstein GPT, announced earlier this week. For now, the product remains in closed pilot. Club take: Trying to put numbers around the financial benefit of Einstein GPT is tough. But speaking generally, we've written before about the quality and importance of Salesforce's software offerings for businesses in the digital age. Einstein GPT may further enhance Salesforce's value proposition for its customers. Our primary focus with Salesforce right now remains the company's efforts to boost its profitability, without disruption to revenue growth, as five activist investors target the company. We're pleased with the progress management is making on that front, as demonstrated by the firm's strong earnings and guidance last week . (Jim Cramer's Charitable Trust is long CRM, LLY, AAPL. See here for a full list of the stocks.) 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The Eli Lilly logo is shown on one of the company's offices in San Diego, California, Sept. 17, 2020.

Mike Blake | Reuters

A trio of Club stocks — Eli Lilly (LLY), Apple (AAPL) and Salesforce (CRM) — are in the news Thursday. Here is a breakdown of the headlines and how they impact our outlooks for each company.