UnitedHealth shares soar after Warren Buffett's new stake provides a vote of confidence
The health care stock popped 12% in morning trading, on track for its best day in five years. UnitedHealth, often viewed as the industry's bellwether, is set to add about 209 points to the Dow Jones Industrial Average at Friday's open.
The advance came after Buffett's conglomerate Berkshire Hathaway revealed a stake of 5 million shares, worth about $1.6 billion. The "Big Short" investor Michael Burry and Appaloosa Management's David Tepper also disclosed sizable stakes in the company.
Shares of UnitedHealth were down nearly 50% for 2025 through Thursday's close before Buffett's filing. The largest private health insurer has become the face of public blowback in this country against the rising costs of health care. UnitedHealth is currently facing a Justice Department investigation into its Medicare billing practices.
In May, the company pulled its annual earnings outlook and CEO Andrew Witty stepped down. Last month, UnitedHealth gave a new 2025 outlook that was well short of Wall Street estimates, hitting the stock further.
"The move by Berkshire represents a big vote of confidence in UNH and likely could provide a near-term trading floor for most of the MCO space and, given Berkshire's investment track record, could serve as a near-term bottom and rallying point for other investors that the space is safe to invest in again," George Hill, a health care analyst at Deutsche Bank, said in a note to clients.
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