LVMH ( LVMHF ) has reclaimed its spot as the biggest company in Europe, overtaking Novo Nordisk ( NYSE:NVO ) after a significant drop in the drugmaker's shares. The cause? Concerns that the US government will push down prices for its weight loss drugs, including Wegovy and Ozempic, through Medicare's new pricing negotiations. Meanwhile, LVMH has been riding high, up nearly 9% over a month. The broader luxury sector got a boost from Richemont's stellar sales growth, reigniting investor confidence that the luxury goods market is bouncing back from its post-Covid slump.

On top of that, Bernard Arnault's wealth is soaring like never before. The LVMH CEO has added $15 billion to his net worth, making him the biggest wealth gainer so far this year. His fortune now sits at $190 billion, climbing him into the fourth spot on Bloomberg's Billionaires Index, knocking out Larry Ellison. With brands like Louis Vuitton, Dior, and Tiffany under its umbrella, Arnault is positioned to continue this winning streak. Even with the luxury sector taking hits in the past year, LVMH's broad brand portfolio and its rebound this year have set it up for sustained growth.

The contrast couldn't be clearer when you look at Novo Nordisk. Shares dropped over 5% after the US government announced it would negotiate prices for the company's blockbuster drugs. After a disappointing trial for its next-gen obesity treatment, the Danish drugmaker's future is looking a little less bright. LVMH, on the other hand, is thriving, and its resurgence is signaling that luxury is backmaking Arnault's stake in LVMH a shining example of where investors should be looking in 2025.

This article first appeared on GuruFocus .