Gilead Sciences, Inc. (NASDAQ:GILD) delivered its strongest commercial momentum in several years during fiscal Q2 2026, with growth extending across HIV, oncology, and liver disease. Total revenue increased 10% year over year to approximately $7.8 billion, while product sales rose 8% to $7.6 billion.

Yet, the income statement tells a considerably less flattering story. Gilead (NASDAQ:GILD) reported a substantial quarterly loss after recording more than $11 billion in acquired research and development expenses. Investors may look at the earnings as a strengthening commercial business, but not without an expensive attempt to build its next generation of growth.

Bull Case

Gilead's (NASDAQ:GILD) underlying business performed strongly during the quarter. Product sales excluding Veklury increased 10% to $7.6 billion, demonstrating that growth was driven by the company's core portfolio rather than its declining COVID-19 treatment. HIV remained the principal contributor, with sales rising 12% to $5.7 billion. Biktarvy revenue increased 7% to $3.8 billion, while Descovy sales climbed 48% to $967 million. Yeztugo, Gilead's (NASDAQ:GILD) twice-yearly injectable HIV-prevention medicine, generated $232 million as its launch continued to gain traction.

It is significant to note that growth in the quarter was not limited to HIV. Liver-disease sales increased 10% to $877 million, supported primarily by higher demand for Livdelzi and treatments for chronic hepatitis B and hepatitis delta. Livdelzi alone generated $167 million, more than doubling year over year.

Trodelvy also strengthened Gilead's (NASDAQ:GILD) oncology case. Driven by higher demand, sales of the breast-cancer treatment increased 26% to $457 million. Although oncology remains much smaller than HIV, Trodelvy's growth provides evidence that Gilead (NASDAQ:GILD) is developing another meaningful commercial franchise. Management responded to the quarter by raising the lower end of its 2026 product-sales guidance. The company now expects 30.1–30.4 billion, compared with 30.0–30.4 billion previously. It also increased its product-sales forecast excluding Veklury to 29.8–30.1 billion, up from 29.4–29.8 billion.

Bear Case

The most visible weakness for the company in the quarter was profitability, as Gilead (NASDAQ:GILD) reported a GAAP loss of $8.45 per share and a non-GAAP loss of $6.75 per share, compared with profits of $1.56 and $2.01, respectively, in the prior year period. These losses primarily reflected a $9.08-per-share impact from acquired in-process research and development expenses and related taxes. Gilead (NASDAQ:GILD) recorded $11.2 billion of acquired IPR&D expenses, principally associated with its acquisitions of Arcellx, Tubulis, and Ouro Medicines.