Johnson & Johnson (NYSE:JNJ) delivered another strong quarter in fiscal Q2 2026, with reported sales increasing 6.6% year over year to $25.31 billion and surpassing analysts’ average estimate of around $25.05 billion. Adjusted earnings per share reached $2.90, also exceeding estimates of $2.85. The healthcare giant raised its full-year outlook and said it remains on track to generate more than $100 billion in annual revenue for the first time in its 140-year history.

Medtronic (NYSE:MDT), meanwhile, ended fiscal 2026 with its fastest annual revenue growth in a decade. Several newer products are gaining traction, particularly within cardiovascular care, strengthening the case that the company’s long-running turnaround is beginning to produce more visible results.

The key distinction for investors is that Johnson & Johnson (NYSE:JNJ) offers more diversified and proven growth, while Medtronic (NYSE:MDT) presents a potentially higher-upside turnaround that still carries meaningful execution and margin risk. Let’s look deeper into that.

Bull Case

Johnson & Johnson’s (NYSE:JNJ) Johnson & Johnson’s Innovative Medicine segment was the principal driver of its strong quarter. Segment sales increased 7.8% year over year to $16.38 billion, supported by growth across oncology, immunology and neuroscience. Following the quarter, Johnson & Johnson raised its full-year reported sales guidance to a midpoint of $101.1 billion, compared with $100.8 billion previously. It also increased the midpoint of its adjusted earnings-per-share forecast by $0.13 to $11.68.

Perhaps the strongest argument supporting Johnson & Johnson (NYSE:JNJ) is its ability to absorb the rapid decline of Stelara without derailing overall pharmaceutical growth. Stelara, which treats several autoimmune conditions, has come under significant pressure following the loss of exclusivity. Nevertheless, Innovative Medicine still recorded operational sales growth of 6.8%, as newer products in oncology, immunology and neuroscience offset much of the decline.

Tremfya, its psoriasis and inflammatory bowel disease drug, has become an especially important part of that transition. Sales of the immunology drug increased 72.5% to approximately $2 billion during the quarter. Strong performance from newer drugs such as Tremfya suggests that the company has developed several growing products capable of supporting the next phase of its pharmaceutical portfolio. That diversification reduces the risk associated with any one patent expiration. It also strengthens the case that Johnson & Johnson’s (NYSE:JNJ) pipeline and commercial execution can sustain Innovative Medicine growth as older products mature.

Medtronic’s (NYSE:MDT) bull case, on the other hand, is based more heavily on improving execution and accelerating product momentum. It reported its highest annual revenue growth in 10 years in its fiscal Q4 and full-year 2026 results, with Q4 revenue reaching $9.8 billion, up 9.9% as reported and 6.6% organic, and FY 26 revenue was $36.4 billion, adjusted revenue of $36.3 billion, up 8.4% as reported and 5.8% organic.

The results suggest that Medtronic’s (NYSE:MDT) turnaround is beginning to extend beyond cost controls and internal restructuring. Growth is increasingly being supported by commercially successful products, and momentum in platforms including Affera, Symplicity, Hugo, Altaviva and Stealth AXiS could help the company sustain faster organic growth if adoption continues.

Furthermore, Medtronic’s (NYSE:MDT) cardiac segment is emerging as one of the most prominent growth drivers for the company, as the Cardiac Ablation Solutions revenue rose 78% globally, including 124% U.S. growth. Several of the company’s newer product launches are beginning to contribute meaningfully to growth, helping strengthen its competitive position in several high-growth markets.

This performance is particularly significant because cardiac ablation represents a large and expanding market. If products such as the Affera mapping and ablation system continue taking share, Medtronic (NYSE:MDT) could establish a stronger position in one of medical technology’s most attractive growth categories.

Bear Case

Despite Johnson & Johnson’s (NYSE:JNJ) strong overall performance, its MedTech segment remains the weaker part of the investment story, with sales slightly missing expectations. Management attributed some of the weakness to temporary headwinds, including inventory-related pressures in China that weighed on Electrophysiology sales and softer U.S. procedure trends affecting Abiomed.

While Johnson & Johnson (NYSE:JNJ) expects these challenges to improve over time, investors may want to watch whether its MedTech business returns to its historical growth trajectory in the coming quarters. Sustained weakness in these businesses could make the company increasingly reliant on its pharmaceutical segment to drive growth.

Investors should also keep an eye out for concentration risk within Johnson & Johnson’s (NYSE:JNJ) pharmaceutical portfolio. Although newer drugs are offsetting Stelara’s decline, the company must continue delivering strong growth across several products merely to replace revenue from one of its former blockbusters. The current transition appears manageable, but any slowdown in Tremfya, Darzalex or the company’s oncology pipeline could make the patent cliff more visible in future results.

Medtronic’s (NYSE:MDT) risks are more fundamental. Investors may want to see several additional quarters of consistent execution before concluding that its turnaround is complete. Management has spent several years attempting to accelerate growth, meaning investors may require additional evidence that recent improvements represent a sustainable change rather than a temporary improvement.

It is also significant to note that much of Medtronic’s (NYSE:MDT) recent momentum has been concentrated in a handful of high-growth product categories, which raises the question of whether growth can become more broad-based across the company’s portfolio. This concern is further amplified by increasing competition in cardiovascular devices and robotic surgery, particularly from companies such as Intuitive Surgical and Boston Scientific.

Tariffs are another important factor for investors to monitor. Management stated that they affected Medtronic’s (NYSE:MDT) business by $74 million, representing an 80 basis point headwind. They are anticipated to continue affecting gross margins, with fiscal year 2027 embedding an impact of around $250 million with no assumed refunds.

Conclusion

Johnson & Johnson (NYSE:JNJ) appears better positioned for investors seeking more dependable growth and lower execution risk. Its Innovative Medicine portfolio has so far absorbed Stelara’s patent-related decline better than expected, and newer products are supporting continued growth and allowing management to raise its full-year outlook.

Medtronic (NYSE:MDT) may offer greater upside if its turnaround continues, particularly given the rapid growth of its cardiac ablation business and expanding pipeline of new medical technologies. Nevertheless, investors still need evidence that stronger revenue growth can produce sustained margin expansion and faster earnings growth.

For now, Johnson & Johnson (NYSE:JNJ) has the stronger overall investment case because its growth is broader, its earnings trajectory is more established, and its business is less dependent on the success of a still-developing turnaround. Medtronic (NYSE:MDT) is becoming more compelling, but it remains the higher-risk choice of the two.

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