Two A+ stocks investors should consider are Alphabet (GOOG) and AbbVie (ABBV).
Alphabet is the top mega-cap stock. It posted $90.2 billion in revenue in the first quarter, driven by strong Google search performance. Its low valuations are compelling, especially when compared to Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA). Apple (AAPL) looks cheap after falling from a high of around $260. However, Alphabet’s search and YouTube businesses will outperform their peers in a downturn.
In the second quarter, Alphabet is not immune to the weak macro environment. APAC-based retailers may spend less on advertising. PDD’s (PDD) Temu and Alibaba (BABA) will lower advertising efforts after tariffs cut the volume of Chinese exports. However, Google’s AI Overviews are driving higher satisfaction and Search usage.
In the drug sector, AbbVie (ABBV) posted strong profits in Q1. Revenue from Humira fell by 50.6% Y/Y, offset by a 70.6% increase in Skyrizi and 57.2% Y/Y for Rinvoq. AbbVie demonstrated strong management by offsetting the patent expiry cliff over the last few years.
Investors who took advantage of the “sky is falling” narrative for Humira benefited. The stock will likely trade at new all-time highs in 2025. Shareholders who lost money holding Merck (MRK), Pfizer (PFE), Regeneron (REGN), or Bristol-Myers Squibb (BMY) may hold ABBV stock instead.