Here’s Why Johnson & Johnson (JNJ) Surged in Q3

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Hedged Equity Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the market is more focused on the tailwind of policy easing than the headwind of weakening fundamentals, resulting in substantial gains despite stagflation emerging as a key concern. In this environment, the fund returned 1.67% (net) during the quarter, compared to 8.13% returns of the S&P 500 Index and 3.53% returns of the secondary benchmark, the CBOE S&P 500 BuyWrite Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Meridian Hedged Equity Fund highlighted stocks such as Johnson & Johnson (NYSE:JNJ). Johnson & Johnson (NYSE:JNJ) is a multinational company that engages in the research, development, and manufacturing of products in the healthcare field. The one-month return of Johnson & Johnson (NYSE:JNJ) was -0.43%, and its shares gained 41.09% of their value over the last 52 weeks. On December 23, 2025, Johnson & Johnson (NYSE:JNJ) stock closed at $205.78 per share, with a market capitalization of $495.785 billion.

Meridian Hedged Equity Fund stated the following regarding Johnson & Johnson (NYSE:JNJ) in its third quarter 2025 investor letter:

“Johnson & Johnson (NYSE:JNJ) is a major healthcare company focused on innovative pharmaceuticals and medical devices. The company faces a critical transition as sales from its blockbuster drug Stelara begin to decline due to patent expiration. However, J&J is successfully executing on its strategy to offset these losses with a robust pipeline of new drugs, particularly in oncology and immunology. The stock responded positively in the quarter as the company demonstrated significant progress on multiple fronts. It secured a landmark FDA approval for Inlexzo, a new bladder cancer treatment with substantial sales potential, and its lung cancer drug Rybrevant moved closer to broader adoption after receiving positive trial data for a more convenient injection format. Strong sales momentum across other key drugs more than compensated for Stelara’s decline, while favorable legal developments eased investor concerns about the company’s ongoing talc litigation.”

BofA Sees J&J’s Premium Multiple as Justified

Johnson & Johnson (NYSE:JNJ) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 103 hedge fund portfolios held Johnson & Johnson (NYSE:JNJ) at the end of the third quarter, up from 95 in the previous quarter. While we acknowledge the risk and potential of Johnson & Johnson (NYSE:JNJ) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Johnson & Johnson (NYSE:JNJ) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Johnson & Johnson (NYSE:JNJ) and shared the list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

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