Buffett's Bet on UnitedHealth: 7 Reasons Why Berkshire Hathaway Just Bought This Monster Health Insurance Stock

Berkshire Hathaway has initiated a position in UnitedHealth Group stock, despite the company's shares plummeting 40% this year. The move aligns with Warren Buffett's investment philosophy, as UnitedHealth fits into his favorite industry of financial services, particularly insurance. The company's business boasts several attributes Buffett seeks, including financial stability, durability, and a massive brand equity.

Berkshire Hathaway, led by Warren Buffett, has initiated a significant position in UnitedHealth Group stock, despite the company's shares plummeting 40% this year. The move aligns with Buffett's investment philosophy, as UnitedHealth fits into his favorite industry of financial services, particularly insurance. The company's business boasts several attributes Buffett seeks, including financial stability, durability, and a massive brand equity.

UnitedHealth Group's stock surged 12.48% following Berkshire Hathaway's disclosure of a new stake worth $1.6 billion, with shares trading at a price-earnings ratio near 12, close to decade-low valuations [1]. The investment comes at a time when the company has faced challenges but trades at attractive valuations. UnitedHealth has been under public criticism over rising healthcare costs and is currently under a Justice Department investigation regarding its Medicare billing practices.

Berkshire Hathaway purchased more than 5 million UnitedHealth shares during the second quarter, making it the 18th-largest position in the conglomerate's $300 billion equity portfolio [1]. The stock's technical picture showed bullish momentum following the disclosure, with prices breaking through key resistance levels on heavy trading volume. UnitedHealth led gains on both the Dow Jones Industrial Average and S&P 500, helping lift broader healthcare sector performance.

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. Despite these headwinds, the company completed its acquisition of Amedisys during the quarter, strengthening its position in home healthcare services.

Buffett's healthcare play may reflect his 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.

Berkshire Hathaway also made several other notable moves during the quarter. The conglomerate added stakes in homebuilders D.R. Horton and Lennar, as well as 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 and reduced holdings in Bank of America while maintaining these as top positions.

Berkshire Hathaway's investment in UnitedHealth Group underscores the company's long-term bullish outlook, reflecting Buffett's strategic approach to value investing. The move positions UnitedHealth as a key player in the healthcare sector, with investor confidence bolstered by one of the world's most respected investors.

References:
[1] https://parameter.io/unitedhealth-group-unh-stock-berkshire-hathaway-investment-drives-major-rally/
[2] https://www.tradingview.com/news/zacks:0c767b982094b:0-invest-like-warren-buffett-with-these-etfs/
[3] https://www.ainvest.com/news/unitedhealth-group-unh-soars-3-22-berkshire-hathaway-1-57b-stake-2508/