1. Johnson & Johnson (NYSE:JNJ)
Johnson & Johnson (NYSE:JNJ) was among Jim Cramer’s stock calls on Mad Money, as he highlighted the AI opportunities in neoclouds. Cramer was bullish on the stock and expects positive developments for the company, as he stated:
You’re going to see some massive moves in real time for no reason whatsoever. Why do we care about this? Because these rotations create dislocations that seem to come out of nowhere, and sometimes those dislocations can give you incredible opportunities to [buy, buy, buy] high-quality companies at a discount that shouldn’t even exist, and it wouldn’t if weren’t for the rotation. Today, we got a bunch of them. I’ve been recommending Johnson & Johnson ever since they mostly got past the overhang from all those talc lawsuits. No, the asbestos litigation hasn’t gone away, but J&J’s now fighting each case individually so there are really no major rulings that can impact the stock that much.
Johnson & Johnson reports on the 15th of July. Often, the stock trades erratically on the report date, I know that, but then it begins to run higher in a stair-step fashion. I think the company will have lots of good news about its myriad blockbuster drugs, especially its oncological franchise. I expect some good news about share gains in cardio, and I like that Johnson & Johnson’s separating itself from the scrum that is orthopedic surgery. Think knees, shoulders, waist, that have become commoditized. Selling the orthopedic business simply gives the rest of the company a much higher price-to-earnings ratio, meaning it goes higher just to get rid of something that’s not so good,
Today, the stock closed down $3.71 at $259.33. Do you know, at one point, the rotation took the stock all the way down to $256? This stock was $263 last week. Nothing’s happened. What a great level to start a position in a high-quality drug company. The crazy thing about J&J, it is now a pure-play pharma business with no consumer exposure to begin with. It sold Kenvue, its over-the-counter business already, and it’s parting with orthopedics, which has a huge, actually, believe it or not, consumer component because of the voluntary nature of what can be very expensive surgery, even after insurance. It’s being taken down by mistake, people. That’s why I think you have to pounce.
Johnson & Johnson (NYSE:JNJ) develops and sells healthcare products, including pharmaceuticals and medical technologies, with treatments in immunology, oncology, neuroscience, cardiovascular care, and infectious diseases.
While we acknowledge the potential of JNJ to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than JNJ and that has 100x upside potential, check out our report about the cheapest AI stock.
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