Warren Buffett's Berkshire Hathaway Discloses $1.6 Billion Stake in UnitedHealth Group Incorporated.

Warren Buffett's Berkshire Hathaway has revealed a $1.6 billion stake in UnitedHealth Group Incorporated (UNH), sending shares soaring over 10%. The investment fits Buffett's playbook of buying quality businesses at bargain prices, despite UNH's troubled reputation this year. Other big names, including Michael Burry and David Tepper, have also been quietly building positions in UNH. The company still carries a Moderate Buy consensus rating with an average price target of $366.52, almost 30% above Thursday's close.

Warren Buffett's Berkshire Hathaway has revealed a $1.6 billion stake in UnitedHealth Group Incorporated (UNH), sending shares soaring over 10%. The investment, disclosed in a regulatory filing, marks a significant move for the legendary investor who has long been critical of the healthcare sector's high costs. Despite UnitedHealth's troubled reputation this year, Buffett's acquisition aligns with his strategy of buying quality businesses at bargain prices.

The investment comes as UnitedHealth faces a series of challenges, including soaring medical costs, federal investigations into its Medicare billing practices, the fallout from the killing of a top executive, and a cyberattack last year. The healthcare conglomerate has signaled prolonged pain with a new, far lower profit forecast as it sees billions of additional costs in the upcoming quarters. Shares of the Dow component have slumped 46% so far this year [1].

Buffett's move is not without precedent. The Oracle of Omaha owned about 1.18 million shares in UnitedHealth between 2006 and 2009 before selling his entire stake in 2010 amid a broader retreat from health insurers. The investment in 5.04 million shares of UnitedHealth Group was executed by Buffett's lieutenants, Todd Combs and Ted Weschler, according to a CNBC report [3].

The investment is part of a broader shift in Berkshire's portfolio. The conglomerate also took small stakes in steel manufacturer Nucor, outdoor advertising company Lamar Advertising, and security firm Allegion. Additionally, Berkshire got back into homebuilders Lennar and DR Horton. These moves signal a pivot toward sectors with inelastic demand and predictable cash flows [3].

UnitedHealth's stock has been a magnet for other big names as well. Michael Burry and Appaloosa Management's David Tepper have also been quietly building positions in UNH. The stock's price-earnings ratio of just under 12 is near its lowest in more than a decade, making it an attractive proposition for value investors [3].

The investment in UnitedHealth underscores the enduring relevance of value investing in an era of speculative tech overvaluation. Buffett's bet on the healthcare sector's resilience and UnitedHealth's long-term structural advantages highlights the importance of focusing on durable cash flows and pricing power over speculative tech [4].

For investors, the takeaway is twofold: diversify across defensive sectors and prioritize quality over hype. UnitedHealth's recent struggles, though significant, are viewed by Buffett as temporary hurdles in a business with a long-term growth trajectory. The company's Optum division, a cash-generating engine with a 22.7% return on equity, and its dominance in Medicare Advantage position it to benefit from demographic tailwinds as the U.S. population ages [4].

References:
[1] https://finance.yahoo.com/news/berkshire-hathaway-acquires-5-million-202333554.html
[2] https://finance.yahoo.com/video/warren-buffetts-berkshire-hathaway-reports-132822475.html
[3] https://www.cnbc.com/2025/08/14/warren-buffetts-berkshire-hathaway-unh.html
[4] https://www.ainvest.com/news/warren-buffett-berkshire-hathaway-invests-unitedhealth-group-strategic-move-long-term-implications-2508/