Executive Summary
- Meta Platforms and Johnson & Johnson have outperformed the S&P 500 year-to-date in 2025, demonstrating resilience amidst market volatility driven by concerns over President Trump’s tariffs.
- Meta Platforms’ significant growth, including a 22% rise in Q2 revenue, is primarily attributed to its advancements and investments in AI, which enhance user engagement and ad conversion rates.
- Johnson & Johnson maintains stability and investor confidence as a “Dividend King” with 62 consecutive years of payout increases, supported by non-cyclical healthcare demand, a robust balance sheet, and a high credit rating.
The Story So Far
- The broader market has experienced volatility, with the S&P 500 briefly entering bear-market territory earlier in 2025 due to investor anxieties over the economic impact of President Donald Trump’s tariffs. Against this backdrop, Meta Platforms has demonstrated significant growth driven by its strategic investments and advancements in artificial intelligence, which enhance user engagement and ad conversion rates. Concurrently, Johnson & Johnson has maintained stability and investor confidence due to its status as a “Dividend King” with non-cyclical healthcare product demand, a robust balance sheet, and a high credit rating, allowing it to outperform despite ongoing challenges.
Why This Matters
- The S&P 500’s brief dip into bear-market territory, primarily driven by investor concerns over President Donald Trump’s tariffs, highlights the significant impact of trade policy on broader market sentiment and corporate profits. However, the outperformance of diverse companies like Meta Platforms, fueled by AI advancements and a new dividend, and Johnson & Johnson, bolstered by its defensive healthcare position and “Dividend King” status despite legal and competitive pressures, demonstrates that resilient investment opportunities exist through varied strategies even amidst economic uncertainty and specific company challenges.
Who Thinks What?
- Meta Platforms attributes its significant growth in sales and earnings to advancements in artificial intelligence, which have enhanced user engagement and ad conversion rates, further bolstered by its open-source approach to AI initiatives.
- Johnson & Johnson maintains investor confidence and stability despite facing lawsuits, potential impacts from President Trump’s tariffs, and new biosimilar competition, citing its position as a healthcare leader with non-cyclical demand, a robust balance sheet, and a high credit rating as key factors.
- Investors, concerned about the potential economic impact of President Trump’s tariffs on corporate profits, caused the S&P 500 to briefly enter bear-market territory earlier in the year.
Meta Platforms and Johnson & Johnson have demonstrated notable resilience and growth, outperforming the S&P 500 year-to-date in 2025, according to an analysis by Prosper Junior Bakiny. This performance comes amidst broader market volatility, which saw the S&P 500 briefly enter bear-market territory in April due to investor concerns regarding the economic impact of President Donald Trump’s tariffs.
Meta Platforms’ AI-Driven Growth
Meta Platforms’ dividend program, initiated last year with a forward yield of 0.3%, complements its substantial growth prospects. The technology giant has seen its sales and earnings increase significantly, with second-quarter revenue reaching $47.5 billion, a 22% rise from the previous year. Net income also surged by 36% to $18.3 billion.
The company attributes much of this growth to its advancements in artificial intelligence (AI). AI-powered algorithms have enhanced user engagement across its platforms and improved ad conversion rates, creating a more effective ecosystem for advertisers. Meta is actively investing in its AI business, opting for an open-source approach for its large language models (LLMs) to attract developers and strengthen its AI initiatives.
Johnson & Johnson’s Stability Amidst Headwinds
Johnson & Johnson has also surpassed market performance this year, with its stock demonstrating a significant year-to-date increase. The company is recognized for its status as a “Dividend King,” having increased its payouts for 62 consecutive years, offering a current dividend yield of 2.66%.
Despite facing ongoing challenges, including numerous lawsuits related to its talc-based products, potential impacts from President Trump’s tariffs, and new biosimilar competition for its immunology drug Stelara, the pharmaceutical giant has maintained investor confidence. Its position as a healthcare leader, offering products with non-cyclical demand, combined with a robust balance sheet and a credit rating reportedly higher than that of the U.S. government, positions it as a relatively safe investment during uncertain market conditions.
Market Context and Outlook
The broader market experienced a brief downturn earlier in the year, with the S&P 500 dipping into bear-market territory. This was primarily driven by investor anxieties over the potential effects of President Trump’s tariffs on corporate profits and the wider economy. However, the market has since recovered.
Both Meta Platforms and Johnson & Johnson have shown their capacity to deliver strong returns, albeit through different strategic avenues. Meta leverages its technological innovation and AI investments for growth, while Johnson & Johnson offers stability, consistent income, and a strong market position in healthcare.
