Was Jim Cramer Right About Johnson & Johnson (JNJ)?

Jim Cramer, the outspoken host of CNBC’s Mad Money, has long been a polarizing figure in investing circles. His bold stock calls and unapologetic opinions have made him a household name, but how do his recommendations hold up over time? Let’s dissect his stance on Johnson & Johnson (NYSE: JNJ), a healthcare giant he has analyzed repeatedly since 2020, to determine whether his advice has aligned with reality.

Cramer’s Bullish Call (2020–2023): A Defensive Play Amid Tariffs

In late 2022 and early 2023, Cramer positioned JNJ as a “recession-proof stock” and a “long-term play” for investors. He highlighted its resilience during the Trump-era tariff wars, which disrupted global supply chains and spooked markets. At the time, JNJ ranked 7th out of 10 stocks analysts were actively discussing amid trade tensions. Cramer argued that its domestic focus and diversified healthcare portfolio made it a safe haven in volatile markets.

The data supports this thesis: JNJ’s shares rose 7.9% year-to-date (YTD) in early 2023, outperforming broader market dips. Cramer’s emphasis on its planned spinoff of the consumer health division—expected to finalize by late 2023—also proved prescient. The move aimed to simplify operations and unlock value, a strategy that institutional investors embraced. By Q4 2022, 81 hedge funds held JNJ stock, a sign of sustained institutional confidence.

The 2024–2025 Pivot: Growth Concerns and AI Skepticism

Cramer’s tone shifted in 2024. During a May 2024 episode of Mad Money, he criticized JNJ for being “too slow growing” and argued that AI stocks held greater promise for short-term returns. He also highlighted unresolved legal issues tied to its talc products, which had plagued the company for years. By Q3 2024, hedge fund ownership of JNJ dipped to 81 funds, and by Q4, it rebounded to 98, reflecting mixed sentiment.

The stock delivered a modest 2.06% return over this period, trailing broader healthcare indices. While Cramer’s skepticism about its growth trajectory was valid—JNJ’s revenue grew just 1.5% annually in 2024—his dismissal of the stock as a long-term hold may have been premature. The company’s dividend yield of 2.8% and fortress-like balance sheet (with $40 billion in cash as of 2024) continued to attract income-focused investors.

Key Takeaways: Where Did Cramer Get It Right?

1. 2020–2023: Bullish Call Validated
   Cramer’s focus on JNJ as a defensive play during trade wars and economic uncertainty was spot-on. The stock’s YTD gains in 2023 and institutional support underscored its stability.

2. 2024–2025: Growth Criticism Holds Water
   While JNJ remained a stalwart dividend payer, its lackluster revenue growth and legal overhang justified Cramer’s skepticism. Investors seeking high beta plays in AI or biotech likely fared better.

3. Hedge Fund Activity: A Mixed Signal
   The fluctuating number of hedge funds holding JNJ—81 in Q3 2024 vs. 98 in Q4—suggests investors remain cautious but not fully deterred. This mirrors broader market sentiment toward “old economy” stocks.

Conclusion: A Nuanced Verdict

Jim Cramer was partially correct in his JNJ analysis. His 2020–2023 bullish stance aligned with the stock’s defensive performance and institutional appeal, while his 2024–2025 criticism of slow growth and preference for AI stocks also held merit. The data paints a clear picture:
- For long-term investors, JNJ remains a reliable dividend machine, especially in volatile markets.
- For growth-focused traders, Cramer’s pivot to AI stocks was prudent—JNJ’s 2.06% return in 2024–2025 paled compared to AI’s 30%+ gains in select names.

In the end, Cramer’s advice was context-dependent. Investors who followed him in 2023 gained stability, while those heeding his 2024 warnings avoided underperformance. As JNJ navigates its next chapter—post-spinoff and with renewed focus on innovation—Cramer’s evolving stance reflects the balance between safety and growth in a shifting healthcare landscape.

Final Take: Stick with JNJ for dividends and defense, but don’t expect moonshots. For aggressive returns, look elsewhere—just as Cramer advised.