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Wall Street is rotating from AI infrastructure into defensive growth names, CNBC's Jim Cramer said, citing Costco, Walmart, ServiceNow, Salesforce and Johnson & Johnson. "Investors are moving away from some of the market's biggest AI infrastructure winners and into companies with growth drivers outside the data center buildout," Cramer said on CNBC's Squawk on the Street. The call comes as AI-related stocks face mounting pressure. The Nasdaq Composite fell more than 1% in premarket trading Tuesday, tracking an overnight 10.8% crash in South Korea's KOSPI index that hit memory and semiconductor names. The Cboe Volatility Index closed at 18.58 on July 24, up from about 14.50 two weeks earlier, reflecting growing unease in tech-heavy portfolios. The rotation marks a potential inflection point for a market dominated by AI-related capital spending since late 2024. With hyperscalers committing roughly $725 billion in combined AI infrastructure spending for 2026, investors are questioning whether those investments will generate returns fast enough to justify stretched valuations in semiconductor and data center stocks. The shift has been building for months. Goldman Sachs data showed hedge funds trimmed tech hardware exposure for four straight weeks heading into July. Chip stock volatility hit a 30-year high relative to the broader market, according to data cited by Cramer, making the trade increasingly difficult to hold for leveraged investors. Nvidia, the bellwether of the AI trade, posted Q1 fiscal 2027 revenue of $81.6 billion, up 85% year over year, yet its shares have been volatile. Advanced Micro Devices trades at a price-to-earnings ratio of 186 after Q1 revenue of $10.25 billion. Super Micro Computer missed consensus revenue by 18% in its most recent quarter and carries $8.8 billion in debt. Even strong earnings have failed to lift share prices: TSMC raised its 2026 capex outlook in mid-July and the stock fell anyway. The stocks Cramer highlighted span consumer staples, healthcare and enterprise software — sectors that offer earnings visibility without direct exposure to data center spending. Costco and Walmart benefit from steady consumer demand and pricing power in an environment where household spending remains resilient. ServiceNow and Salesforce provide recurring subscription revenue tied to enterprise digitization, a trend that predates the AI boom and continues regardless of data center investment cycles. Johnson & Johnson offers healthcare exposure with a diversified pharmaceutical and medical devices business that generates consistent cash flow across economic cycles. The rotation mirrors a pattern that emerged in late June, when the Dow Jones Industrial Average hit a record 52,615 on the same day Nvidia and Apple fell 2% to 5%. Nine of 11 S&P 500 sectors rose or held steady that session, even as tech names sold off. Cramer has been warning about leveraged AI exposure for weeks, telling investors on his July 27 Mad Money show to sell leveraged positions "no matter what" at the market open. For portfolio managers, the question is whether this rotation represents a tactical shift or the start of a longer-term trend. Banking earnings have been strong — JPMorgan posted a 33% earnings beat in Q2 with equity markets revenue surging 86% year over year — while industrial names like J.B. Hunt have gained 50% year to date. The data supporting a move into non-tech sectors is accumulating, even as AI infrastructure spending remains at record levels. Cramer's track record on sector calls is mixed, but the underlying earnings momentum in financials and industrials provides a fundamental basis for the rotation that extends beyond any single commentator's opinion. This article is for informational purposes only and does not constitute investment advice.
**President Trump is pressing HHS Secretary Robert F. Kennedy Jr. to slash the recommended childhood vaccine schedule, overruling political advisers who urged restraint ahead of the midterms.** President Trump is pushing Health and Human Services Secretary Robert F. Kennedy Jr. to cut the recommended childhood vaccine schedule from 17 to 11 diseases, pressing for action on an alleged vaccine-autism link that scientists say lacks evidence. "Countless parents with questions and concerns about America's skyrocketing autism rates have long been ignored if not mocked," said Kush Desai, White House spokesman. "The Trump administration is committed to leaving no stone unturned to finally address these concerns with Gold Standard Science." Kennedy in January proposed cutting the recommended childhood shots to vaccinations against 11 diseases, down from 17 under previous guidelines. Federal Judge Brian E. Murphy blocked the plan in March, ruling the government improperly bypassed a vaccine advisory panel. Trump signed an executive order in May demanding HHS cut the schedule, saying the U.S. was out of step with other nations. The push threatens revenue streams for vaccine manufacturers including Merck & Co., Pfizer Inc. and Johnson & Johnson, which collectively generate billions from childhood immunization programs. Autism rates have risen to roughly 1 in 31 8-year-olds in 2022 from 1 in 150 in 2000, though scientists have yet to pinpoint a definitive cause, with some citing genetics, older parents and better screening. **White House Divided on Vaccine Strategy** Behind the scenes, the president's push has created tension within his administration. White House political advisers and pollster Tony Fabrizio found that vaccine skepticism was unpopular with voters, recommending Kennedy focus instead on popular food-safety initiatives such as removing dyes from products. Kennedy and his staff got on board, with top adviser Calley Means penning a memo about "green light" messaging on dietary guidelines and "red light" topics such as vaccines. But Trump, at odds with his own aides, has not dropped his focus. He has told Kennedy that studying the vaccine-autism link should be his most important health policy priority, people familiar with the matter said. The president hopes alleviating autism could be part of his legacy. **Pharma Sector Faces Regulatory Uncertainty** The policy uncertainty comes as HHS faces broader challenges, including a three-decade high in measles cases and an expanding cyclosporiasis outbreak. Inside the department, officials have scrambled to show progress, with former Harvard epidemiologist Martin Kulldorff leading vaccine studies that could take months or years to complete. The National Institutes of Health has also launched studies on autism-related issues. Meanwhile, speculation swirls about Kennedy's tenure. White House aides conducted a top-to-bottom review of HHS management last winter, and Medicare chief Chris Klomp now oversees day-to-day operations. Dr. Mehmet Oz, the CMS administrator, is widely viewed by lobbyists and HHS staff as a potential successor, possibly after the midterm elections. The regulatory push creates a binary outcome for vaccine manufacturers: If the administration succeeds in cutting the schedule, childhood immunization revenue faces structural decline. If courts continue to block the changes, the industry avoids disruption — but the political pressure signals sustained uncertainty through at least the midterm election cycle. This article is for informational purposes only and does not constitute investment advice.
Johnson & Johnson agreed to pay as much as $5.5 billion to resolve roughly 76,000 ovarian talc lawsuits. "After decades of litigation and full vetting of the science in an extensive hearing, plaintiffs effectively conceded their inability to prove specific causation," Erik Haas, Worldwide Vice President of Litigation at Johnson & Johnson, said. "The Court's order placed plaintiffs in an untenable position of having to present specific causation evidence to maintain their claims that does not exist." The proposed resolution follows a July 22 ruling by the Multi-District Litigation court ordering plaintiffs to show why their claims should not be dismissed after they withdrew their specific causation experts in two bellwether cases. The hearing demonstrated those opinions were not based upon reliable scientific methodologies, the company said. The settlement is conditioned on participation by lead plaintiff firms representing at least 95% of the remaining claims. JNJ committed $5.5 billion, with the first payment of no more than $3 billion due in 2027 and no additional payments before 2028. The agreement brings finality to a 15-year legal battle that has weighed on JNJ's stock and public perception. The company has prevailed in the vast majority of ovarian cases tried to date and previously settled about 95% of mesothelioma lawsuits and all state consumer protection claims, as well as all talc-supplier disputes. The MDL court's specific causation ruling confirmed JNJ's longstanding position that the claims lacked scientific merit, the company said. Research and decades of studies by independent medical experts around the world continue to support the safety of cosmetic talc, according to JNJ. The company has maintained that its talc products do not contain asbestos and do not cause cancer, a position supported by US scientific organizations and regulatory agencies. JNJ discontinued talc-based Johnson's Baby Powder globally in 2023 as part of a worldwide portfolio assessment. The company separated its consumer health business, Kenvue, in August 2023, but retained all talc-related liabilities and agreed to indemnify Kenvue for any costs from US and Canadian litigation. The settlement removes a major legal overhang that has shadowed JNJ for years. Investors will watch for confirmation that the 95% participation threshold has been met, which would effectively end the ovarian talc litigation. This article is for informational purposes only and does not constitute investment advice.
**Johnson & Johnson received FDA marketing authorization for its OTTAVA robotic surgical system, the first table-integrated soft-tissue robot, clearing the healthcare giant to compete directly with Intuitive Surgical's dominant da Vinci franchise.** Johnson & Johnson said Wednesday the U.S. Food and Drug Administration granted De Novo authorization for the OTTAVA Robotic Surgical System, the world's first table-integrated soft tissue robotic system, for use in 10 general surgery procedures including gastric bypass, cholecystectomy and hiatal hernia repair. The clearance opens a direct challenge to Intuitive Surgical, whose da Vinci systems performed more than 2.4 million procedures globally in 2025 and generated $7.1 billion in revenue. "We are pioneering a new category of surgical robotics with OTTAVA," said Tim Schmid, Executive Vice President and Worldwide Chairman of MedTech at Johnson & Johnson. "This is the start of the next era in surgery as we deliver not just a new surgical robotics system, but a catalyst for fundamentally better surgical care." The OTTAVA system's defining architectural feature is its integration of four robotic arms directly into the operating table, eliminating the boom- and cart-mounted designs used by Intuitive's da Vinci and competitors such as Asensus Surgical and CMR Surgical. J&J said the design occupies 30% to 50% less floor space than traditional systems, creating additional room for surgical teams. The system includes automated pre-defined procedural poses for setup and breakdown, and a "twin motion" feature that synchronizes table and arm movement for patient repositioning without intraoperative adjustments. Instrumentation includes a two-in-one needle driver designed to reduce unintended suture cutting and monopolar curved scissors for consistent cutting performance, tested across 900 cold and 2,460 hot cuts. **Why OTTAVA Is Different From Existing Surgical Robots** The soft-tissue robotics market has been dominated by Intuitive Surgical for more than two decades, with the da Vinci system holding an estimated 80% share of the global installed base of roughly 9,000 systems. J&J's entry comes after years of development and a prior failed attempt with the Verb Surgical joint venture, which was dissolved in 2020. The OTTAVA system's table-integrated design addresses a key pain point for hospitals: OR space constraints. Traditional robotic systems require dedicated carts and booms that consume significant floor area and complicate room turnover. J&J claims its smaller footprint can help hospitals expand robotic surgery capacity without renovating operating rooms. The system is also connected to J&J's Polyphonic digital ecosystem, a secure platform that aggregates surgical data, learning tools and performance analytics. "Variability of surgical outcomes remains a challenge in healthcare," said Peter Schulam, M.D., Ph.D., Chief Scientific Officer of MedTech at Johnson & Johnson. "While surgical robotics has helped augment surgical skill, the next generation of care must also integrate data and insights across the surgical ecosystem to support surgeon judgement." **Commercial Rollout and Competitive Timeline** J&J said it will begin a U.S. commercial launch with select customers, focusing on early customer success before expanding to additional indications and regulatory jurisdictions. A U.S. clinical trial for OTTAVA in inguinal hernia procedures is ongoing. The company will host an investor conference call on Aug. 3 at 8 a.m. Eastern Time to discuss the launch strategy. The De Novo classification is notable: it means the FDA determined OTTAVA is a novel device with no legally marketed predicate, creating a higher regulatory bar for potential copycats. J&J will need to build surgeon training programs and clinical evidence to drive adoption — a process that took Intuitive years to establish. The company said its OTTAVA education program, developed with clinicians and surgical societies, includes virtual, hands-on and immersive training modules. For investors, the question is how quickly J&J can capture share in a market where Intuitive's installed base and surgeon familiarity create high switching costs. JNJ shares trade at roughly 16 times forward earnings, a discount to Intuitive's 55 times multiple, reflecting the market's uncertainty about J&J's ability to disrupt the robotics market. If OTTAVA gains traction, it could add $1 billion to $2 billion in annual MedTech revenue within five years, analysts at Bloomberg Intelligence have estimated. The investor call on Aug. 3 will provide the first detailed look at J&J's pricing, target accounts and adoption timeline. This article is for informational purposes only and does not constitute investment advice.
Johnson & Johnson reported second-quarter Spravato (esketamine) sales of $584 million, a 25% sequential increase that Jefferies said supports the long-term market opportunity for psychedelic drug developers. "The momentum in treatment-resistant depression and major depressive disorder with suicidal ideation supports the notion psychedelics can be commercially viable in hard-to-treat mental health disorders," Jefferies analysts wrote, citing J&J's investment in treatment sites, physician education and reimbursement. US sales accounted for $514 million of the total, implying an annualized revenue run rate above $2.3 billion. J&J has guided for Spravato to reach $3 billion to $3.5 billion in annual sales by 2027-2028, with a peak target of as much as $5 billion. More than 250,000 patients worldwide have been treated with the therapy cumulatively, according to the firm. The read-through lifts developers including AtaiBeckley Inc., Compass Pathways and Cybin Inc., Jefferies said. Compass plans to complete its rolling New Drug Application for COMP360 (psilocybin) in the fourth quarter of 2026, supporting a potential approval by year-end and a commercial launch in the first half of 2027. AtaiBeckley's Phase III program for BPL-003 in treatment-resistant depression is expected to generate data in early 2029, with Phase II data for VLS-01 due later this year. Jefferies noted that J&J's network of approximately 7,000 to 8,000 US treatment sites could help adoption of future psychedelic therapies. Atai's intranasal BPL-003 could fit within the same two-hour treatment framework currently used for Spravato, the analysts added. The strong Spravato quarter shows that the infrastructure for psychedelic-assisted therapies is already being built at scale. Investors will watch Compass Pathways' NDA submission in late 2026 as the next major event for the sector. This article is for informational purposes only and does not constitute investment advice.
**Key Takeaways:** - Q2 revenue of $25.31 billion beat consensus by $260 million - Tremfya sales surged 72.5% to $2 billion, offsetting Stelara erosion - Full-year sales guidance raised to $101.1 billion midpoint Johnson & Johnson reported second-quarter revenue of $25.31 billion, up 6.6% from a year earlier and above the $25.05 billion consensus, as growth from its immunology and oncology portfolios offset patent losses on older drugs. "The results reflect strong commercial execution across our Innovative Medicine and MedTech segments," Chief Financial Officer Joseph Wolk said in an interview. He noted that the company's pipeline of more than 20 novel therapies targeting regulatory filings by 2030 provides a clear growth trajectory. Adjusted earnings came in at $2.90 per share, topping the $2.85 analyst estimate by 1.8%. The pharmaceutical unit generated $16.38 billion in quarterly sales, ahead of the $16.1 billion forecast, while MedTech contributed $8.93 billion, slightly trailing expectations. The company raised its full-year sales forecast to about $101.1 billion at the midpoint, from $100.8 billion previously, and lifted its adjusted earnings per share outlook to $11.68 from $11.55. The guidance raise signals management expects demand for its newer products to sustain momentum through the second half. **Tremfya leads immunology growth as Stelara fades** Sales of Tremfya, a treatment for plaque psoriasis and inflammatory bowel disease, jumped 72.5% to $2 billion, beating the $1.74 billion consensus. The drug has become J&J's second-largest product as it fills the gap left by Stelara, whose revenue has collapsed after losing patent protection. Stelara sales fell 62% in the first quarter, and analysts expect a similar decline in the second quarter. Blood cancer therapy Darzalex, J&J's top-selling drug, generated $4.2 billion in the quarter, roughly in line with analyst estimates. The company is also counting on Carvykti, a personalized cell therapy for multiple myeloma that grew 57% in the first quarter to $597 million, to expand its oncology footprint. **MedTech growth tempered by Abiomed slowdown** The medical technology unit posted $8.93 billion in sales, slightly below analyst estimates, as Abiomed heart pump sales fell 2% year over year after a 14% growth rate in the first quarter. Wolk attributed the decline to a United Kingdom study that raised questions about Impella pump use during high-risk coronary procedures. "We have a big data set coming out probably in the first half of next year that should allay any fears," Wolk said. J&J has 28 platforms generating at least $1 billion in annual revenue, reducing its dependence on any single product. **AI and robotics drive next growth wave** Beyond the quarterly numbers, J&J is pushing into artificial intelligence-powered imaging and mapping for electrophysiology, a drug delivery system for bladder cancer, and a table-integrated robotic surgical system. The company has committed more than $55 billion to United States manufacturing and research through 2029, including $1 billion to expand its ACUVUE contact lens production in Jacksonville, Florida. The guidance raise and pipeline momentum position J&J to sustain its roughly 24.5% year-to-date gain, which has more than doubled the S&P 500's return. Investors will watch the pace of Icotyde prescriptions — the first daily pill in the IL-23 inhibitor class, approved in March — as a key indicator of future revenue growth. This article is for informational purposes only and does not constitute investment advice.
Johnson & Johnson reported second-quarter revenue of $25.31 billion, beating the $25.02 billion analyst consensus, as growth in oncology drugs and medical devices offset continued biosimilar pressure on Stelara. "The results demonstrate the power of our innovation, the depth of our portfolio and the momentum in our pipeline," Joaquin Duato, chairman and chief executive officer at Johnson & Johnson, said. Adjusted earnings per share came in at $2.90, topping the $2.86 consensus and rising from $2.77 a year earlier. The Innovative Medicine segment posted operational sales growth of 6.8%, led by Darzalex, Carvykti and Tecvayli in oncology and Tremfya in immunology. MedTech grew 3.6% operationally, driven by wound closure, biosurgery and electrophysiology products. US sales rose 7.3% to $14.53 billion, while international sales increased 5.7% to $10.78 billion. The company raised its full-year 2026 adjusted EPS guidance to a range of $11.60 to $11.75, with a midpoint of $11.68 that sits above the $11.58 analyst consensus. Revenue guidance of $100.8 billion to $101.4 billion came in slightly above the $101.06 billion estimate. Shares fell about 1% in premarket trading Wednesday despite the beat, as investors weighed the outlook against the stock's 25% year-to-date gain. The guidance raise signals management expects continued momentum from oncology and immunology franchises to sustain growth through year-end. Investors will watch the next quarterly report for updates on the planned DePuy Synthes orthopaedics separation and pipeline progress on Icoyde and the Tecvayli-Darzalex Faspro combination. This article is for informational purposes only and does not constitute investment advice.
**CNBC's Jim Cramer told investors to buy Johnson & Johnson, PepsiCo, Starbucks, Constellation Brands and TJX as high-quality stocks unfairly swept lower by institutional selling during a market rotation.** The rotation out of technology stocks into defensive sectors accelerated Monday, with CNBC's Jim Cramer naming five companies he said were unfairly caught in the selling. Johnson & Johnson, PepsiCo, Starbucks, Constellation Brands and TJX all offer the pricing power and steady cash flows that typically attract capital during rotation trades. "These are great companies that got caught up in the selling for no good reason," Cramer said on "Mad Money" July 6. "Use this rotation as an opportunity to buy high-quality names." The Philadelphia Semiconductor Index's 87.8% surge in the second quarter, its best since records began in 1994, had left growth stocks extended relative to defensive sectors, according to Axios. Nvidia traded near $196.58 after the chip sector pulled back on supply glut fears and Michael Burry's bubble warning. GE Vernova, another Cramer favorite, closed at $1,113.11 July 2, up 70.63% year-to-date. The rotation signals institutional profit-taking after a prolonged tech rally. For investors, Cramer's five picks span consumer staples, healthcare and retail — sectors that could outperform if the rotation broadens into the second half. **The 5 stocks and what they offer** Johnson & Johnson, the healthcare giant with a diversified portfolio of pharmaceuticals and medical devices, trades at a valuation that Cramer called attractive relative to its growth prospects. PepsiCo and Starbucks give investors exposure to consumer spending trends with global brand moats. Constellation Brands, the beer and wine distributor behind the Corona and Modelo brands, benefits from pricing power in the alcoholic beverage market. TJX, the off-price retailer behind T.J. Maxx and Marshalls, offers a defensive retail model that performs well when consumers trade down. **Rotation dynamics favor defensives** The move into defensive stocks comes after a period where technology and AI-related names dominated market leadership. The Philadelphia Semiconductor Index's record-breaking quarter pushed valuations in the sector to levels that made them vulnerable to profit-taking. Cramer's recommendation to buy consumer staples and healthcare names reflects a view that the rotation has further to run. **What comes next** The sustainability of the rotation depends on several factors, including upcoming earnings reports and the Federal Reserve's next policy decision. If institutional selling continues to target growth names, Cramer's five picks could benefit from continued capital rotation into defensive sectors. This article is for informational purposes only and does not constitute investment advice.
**Johnson & Johnson is walking away from the $100 billion GLP-1 weight-loss drug race, betting its diversified oncology and medical device businesses will deliver steadier returns than a rival increasingly dependent on a single drug category.** Johnson & Johnson is steering clear of the $100 billion GLP-1 weight-loss market, betting its portfolio of cancer treatments and medical devices will outperform a rival whose revenue is increasingly tied to one drug class. "We are not going to get caught up in the hype," Chief Executive Officer Joaquin Duato said, explaining the company's decision to focus on areas where it already holds strong positions, including bone and lung cancer treatments. The contrast with Eli Lilly is stark. Weight-loss drugs now account for nearly two-thirds of Lilly's revenue, according to company filings, leaving it exposed to pricing pressure, competition from Novo Nordisk and potential safety concerns tied to long-term GLP-1 use. JNJ generates revenue across pharmaceuticals and medical devices — surgical tools, joint replacements and other procedure-based products that face less disruptive competition. The strategic divergence is reflected in valuation. Eli Lilly trades at more than 40 times earnings, while JNJ trades at 29 times. JNJ's dividend yield of 2.1% also exceeds Lilly's 0.6%, offering income investors a wider cushion. The question is whether JNJ's caution will prove prescient or leave it missing the biggest pharma opportunity in decades. **Oncology and Devices as Growth Levers** JNJ's oncology push includes a recent acquisition of a company with a promising prostate cancer drug candidate, adding to its existing strength in bone and lung cancer. The company is also one of the world's largest medical device makers, a segment that provides recurring demand tied to surgical procedures rather than prescription refills. Members of Congress have been loading up on both JNJ and UnitedHealth stock, according to recent trading disclosures, signaling bipartisan confidence in the healthcare sector's defensive qualities. **GLP-1 Risks Remain Under Scrutiny** The GLP-1 market faces growing questions over long-term safety. A 2021 study funded by Novo Nordisk found that patients who stopped taking semaglutide regained two-thirds of their lost weight within a year, with cardiovascular benefits reversing as well. Gastrointestinal side effects — nausea, vomiting and diarrhea — remain the most common complaints, while more serious risks include pancreatitis and potential thyroid tumors, according to FDA labeling. For income-focused investors, the choice may come down to yield and diversification. JNJ's 2.1% dividend, backed by a 61-year streak of increases, offers a predictable return stream. Lilly's 0.6% yield reflects its growth-stage valuation, where investors are betting on future earnings rather than current cash returns. The divergence means JNJ shareholders are not betting on a single drug class. They are betting on a conglomerate with pricing power across multiple healthcare segments. Lilly shareholders are betting that GLP-1 drugs remain the standard of care for obesity and diabetes for years to come, with no major safety or pricing shocks. *This article is for informational purposes only and does not constitute investment advice.*