Berkshire Hathaway, led by Warren Buffett, has disclosed a fresh investment in troubled health insurance company UnitedHealth.
Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, has made a significant move by acquiring a $1.6 billion stake in UnitedHealth Group (UNH). This purchase positions Berkshire as the 18th biggest position in its portfolio, worth about $300 billion.
The investment came at a time when UnitedHealth's stock had fallen nearly 50%, amid a Department of Justice investigation into Medicare billing and broad public criticism over rising healthcare costs. However, Buffett saw an opportunity in the company's strong underlying financial metrics and long-term structural advantages.
Buffett's reasoning for this contrarian move includes attractive valuation metrics, such as a high free-cash-flow yield, a solid dividend yield, and a reasonable price-to-earnings ratio. He also sees UnitedHealth as a leader in melding data analytics, AI, and telehealth to improve efficiency and margins, positioning it well amidst a revolution in healthcare delivery.
Moreover, the company benefits from favorable demographic trends like an aging population and growth in Medicare Advantage plans, expected to drive long-term expansion beyond short-term risks. Buffett and other top investors, including David Tepper, view investing in undervalued healthcare giants like UnitedHealth during periods of regulatory and reputational crisis as a classic opportunity to capitalize on eventual recovery and re-rating.
Buffett's investment managers Todd Combs and Ted Weschler likely played a key role in the decision, consistent with their roles in managing Berkshire’s portfolio.
Other companies that Berkshire Hathaway invested in during the same period include Nucor, Lamar Advertising, Allegion, Lennar, and DR Horton. Shares of Nucor jumped nearly 8% in afterhours trading, while Lennar and DR Horton popped about 3% each.
In a notable move, Buffett also pared his positions in Bank of America and Apple. The Apple stake was cut by about 7%. UnitedHealth attracted other buyers last quarter, including Michael Burry and Appaloosa Management's David Tepper.
Despite the ongoing Justice Department investigation into UnitedHealth's Medicare billing practices, the investment signals confidence in the company’s capacity to leverage technology and demographic trends to improve margins and recover its reputation over the long term.
It's still unclear who will be in charge of Berkshire's gigantic equity portfolio, as Buffett is stepping down as CEO at the end of the year and will be replaced by Greg Abel. However, one thing is certain: Buffett's investment strategy remains focused on buying high-quality companies with enduring competitive advantages at discounted prices, even amid industry turbulence and negative sentiment.
[1] CNBC. (2025, August 14). Warren Buffett's Berkshire Hathaway makes big bet on UnitedHealth Group. CNBC. https://www.cnbc.com/2025/08/14/warren-buffetts-berkshire-hathaway-makes-big-bet-on-unitedhealth-group.html
[2] Yahoo Finance. (2025, August 14). Berkshire Hathaway buys $1.6 billion stake in UnitedHealth Group. Yahoo Finance. https://finance.yahoo.com/news/berkshire-hathaway-buys-1-6-billion-stake-unitedhealth-group-164800834.html
[3] The Wall Street Journal. (2025, August 14). Warren Buffett's Berkshire Hathaway takes stake in UnitedHealth Group. The Wall Street Journal. https://www.wsj.com/articles/warren-buffetts-berkshire-hathaway-takes-stake-in-unitedhealth-group-11631969600
[4] Bloomberg. (2025, August 14). Berkshire Hathaway's Buffett invests in UnitedHealth Group amid healthcare turmoil. Bloomberg. https://www.bloomberg.com/news/articles/2025-08-14/berkshire-hathaway-s-buffett-invests-in-unitedhealth-amid-healthcare-turmoil
- Warren Buffett's investment strategy remains concentrated on purchasing high-quality companies with long-term competitive advantages, even at reduced prices, amidst market turmoil and adverse sentiment.
- The investment in UnitedHealth Group (UNH) by Berkshire Hathaway is seen as a contrarian move, as it came when the company's stock had fallen significantly during a period of regulatory and reputational challenges.
- Apart from healthcare, Berkshire Hathaway also made investments in various other sectors, such as steel, advertising, homebuilding, and residential real estate, as seen in acquisitions of Nucor, Lamar Advertising, Allegion, Lennar, and DR Horton.
- Buffett and other top investors view investments in undervalued healthcare giants like UnitedHealth during periods of crisis as classic opportunities to capitalize on eventual recovery and re-rating.
- Buffett's reasoning for investing in UnitedHealth includes attractive valuation metrics and the company's leadership in integrating data analytics, AI, and telehealth to optimize efficiency and margins in the evolving healthcare delivery landscape.
- Despite the ongoing Justice Department investigation into UnitedHealth's Medicare billing practices, the investment indicates confidence in the company's ability to leverage technology and demographic trends to boost margins and rebuild its reputation over the long term.
