TLDR
- Warren Buffett’s Berkshire Hathaway bought over 5 million UnitedHealth shares worth $1.6 billion in Q2
- UnitedHealth stock jumped 12.48% following the disclosure, leading Dow and S&P 500 gains
- The company completed its acquisition of Amedisys, expanding healthcare services
- UnitedHealth shares had been down nearly 50% for 2025 before Berkshire’s investment
- Stock is trading at PE ratio near 12, close to decade-low valuations
UnitedHealth Group stock surged over 12% after Warren Buffett’s Berkshire Hathaway disclosed a new stake in the healthcare giant. The investment comes at a time when the company has faced challenges but trades at attractive valuations.
Berkshire Hathaway purchased more than 5 million UnitedHealth shares during the second quarter. The stake is worth approximately $1.6 billion based on June-end prices.
The investment represents the 18th-largest position in Berkshire’s $300 billion equity portfolio. UnitedHealth now sits behind Amazon and Constellation Brands in terms of portfolio weighting.
Shares jumped 6% in extended trading immediately after the disclosure. The stock continued climbing the following day, posting gains of over 14%.
The timing of Buffett’s investment is noteworthy given UnitedHealth’s recent struggles. Shares had fallen nearly 50% for 2025 through Thursday’s close before the filing became public.
UnitedHealth has faced public criticism over rising healthcare costs. The company is currently under Justice Department investigation regarding its Medicare billing practices.
Strategic Moves Drive Recovery
CEO Andrew Witty stepped down in May after the company pulled its annual earnings outlook. UnitedHealth later provided new 2025 guidance that fell short of Wall Street estimates.
Despite these headwinds, the company completed its acquisition of Amedisys during the quarter. The deal strengthens UnitedHealth’s position in home healthcare services.
The stock now trades at a price-earnings ratio just under 12. This valuation sits near the lowest levels seen in more than a decade.
UnitedHealth’s financial metrics remain solid despite recent challenges. The company reported revenue of $400.28 billion with strong margins across key metrics.
Buffett’s Healthcare Play
Warren Buffett has been critical of the U.S. healthcare system in the past. He once called it a “tapeworm” on the economy due to high costs.
In 2018, Buffett partnered with Jeff Bezos and Jamie Dimon on a healthcare venture. The joint effort aimed to improve employee healthcare but was eventually shut down.
The UnitedHealth investment may reflect Buffett’s value-oriented approach. The Oracle of Omaha often seeks bargains in quality companies facing temporary setbacks.
It’s possible that Berkshire’s investment managers Todd Combs or Ted Weschler led this purchase. Buffett has delegated some stock-picking duties to his lieutenants in recent years.
Other investors also bought UnitedHealth shares last quarter. Michael Burry and David Tepper’s Appaloosa Management both added positions.
The stock’s technical picture showed bullish momentum following the disclosure. Prices broke through key resistance levels on heavy trading volume.
UnitedHealth led gains on both the Dow Jones Industrial Average and S&P 500. The rally helped lift broader healthcare sector performance.
Berkshire made several other notable moves during the quarter. The conglomerate added stakes in homebuilders D.R. Horton and Lennar.
The company also bought shares in steel manufacturer Nucor and outdoor advertising firm Lamar. These positions represent smaller bets compared to the UnitedHealth stake.
Buffett trimmed his Apple position by about 7% during the quarter. He also reduced holdings in Bank of America while maintaining these as top positions.
