Equity markets started 2025 pretty well, but things haven't been so rosy in the past couple of months. The tech-heavy Nasdaq Composite index is down by 8% since the beginning of the year as I write this. No one can predict how the market will move in the coming weeks and months. It may recover quickly, or global macroeconomic tensions and fears of a recession may lead to a full-blown bear market.
Whatever happens, though, some stocks are still worth investing in and holding on to through market volatility. Two excellent examples are DexCom (DXCM 3.13%) and Vertex Pharmaceuticals (VRTX 2.81%).
1. DexCom
DexCom's issues predate the recent market volatility. The company did not perform well last year as its financial results disappointed investors. The stock dropped 37% through 2024. DexCom is down by 8% this year as I write this, probably partly due to recent market activity. DexCom might or might not recover soon, but the company's long-term prospects remain attractive.
The medical device specialist focuses on diabetes care. It is a leader in the continuous glucose monitoring (CGM) market, thanks to devices such as the G7, which helps diabetes patients keep track of their blood glucose levels. CGM devices have proven incredibly valuable in helping diabetics achieve better health outcomes.
That's why third-party payers have increasingly opted to cover them. Yet, even in the U.S., the percentage of CGM users trails the covered population, granting DexCom plenty of room to grow.
The situation in much of the rest of the world is somewhat similar. Only 1% of diabetes patients worldwide use CGM devices, according to some estimates, a shockingly low number. While a substantial percentage of them are in countries where DexCom doesn't do business, the company still has plenty of runway in its existing geographies and has historically entered new territories. So, expect DexCom's addressable market to expand over time.
Further, the company recently launched an over-the-counter CGM option in the U.S., Stelo. This matters because, until last year, CGM devices in the U.S. were available only through prescription and primarily to type 1 diabetes patients or those with type 2 who need insulin. The launch of Stelo added a population of 25 million type 2 patients not on insulin to DexCom's market.
As more patients use DexCom, more companies will make their insulin pens, pumps, health apps, etc., compatible with DexCom's platform, and that will drive more people to DexCom devices. This virtuous cycle will grant the company a strong competitive advantage. DexCom's CGM devices already work with several popular pumps, the Apple Watch, and more.
DexCom has successfully ridden the increased adoption of CGM to deliver excellent financial results.
DXCM Revenue (Quarterly) data by YCharts
Expect the company to do the same in the next five years (and beyond), no matter how equity markets behave in the next few months.
2. Vertex Pharmaceuticals
Biotech giant Vertex Pharmaceuticals has defied the recent marketwide sell-off. The company's shares are up by an impressive 27% since 2025 began. Though it's impossible to tell whether the drugmaker will maintain that momentum through the next few months, investors can be confident in the stock's long-term potential. Consider that since December, Vertex Pharmaceuticals has earned approval for two brand-new medicines: Alyftrek and Journavx.
The former is the biotech's latest cystic fibrosis (CF) medicine. Vertex Pharmaceuticals holds a monopoly in the market for drugs that target the underlying causes of this rare lung disease. Alyftrek represents yet another breakthrough for the company in this field. Journavx is the first non-opioid oral pain inhibitor to earn approval from the U.S. Food and Drug Administration.
Many patients and physicians want to move away from opioid-based pain meds because of their potentially severe side effects and risk of addiction. Vertex Pharmaceuticals sees a market of about 80 million patients in acute pain for Journavx. This new medicine could easily reach blockbuster status, especially considering potential label expansions.
Vertex Pharmaceuticals' lineup also features Casgevy, a gene-editing treatment for two rare blood diseases. Though this therapy is taking time to gain traction -- it takes a while to administer gene-editing medicines -- it should eventually contribute meaningfully to the company's results. Beyond that, Vertex Pharmaceuticals is working on several exciting pipeline candidates, including inaxaplin, a potential medicine for APOL-1 mediated kidney disease. There are no approved treatments that target the underlying causes of this condition.
Vertex Pharmaceuticals is working on a potential functional cure for type 1 diabetes. The company has proven innovative abilities, and through its breakthroughs in CF, it has delivered strong results in the past decade.
VRTX Revenue (Quarterly) data by YCharts
Vertex Pharmaceuticals' prospects look equally bright, considering its strong pipeline and current portfolio of medicines, which should drive top-line growth well into the 2030s.
