As UnitedHealth stock surges after strong earnings, investors question timing of Berkshire's sale
Category: Business
On a day when UnitedHealth Group (UNH) shares surged past $394 following a strong earnings report, the news of Berkshire Hathaway's complete exit from its 5.04 million-share position in the healthcare giant sent ripples through the investing community. The move, confirmed in Berkshire's latest regulatory filings, has left many retail traders scratching their heads, especially as UNH stock has rallied approximately 45% since early February 2026.
The question on many minds is whether Berkshire's decision to sell was premature, particularly as UnitedHealth's stock had traded in the $250-$290 range during the first quarter before rebounding significantly after the earnings announcement.
UnitedHealth reported its first-quarter 2026 earnings on April 21, delivering an adjusted earnings per share (EPS) of $7.23, far exceeding Wall Street's expectations of $6.57 to $6.76. Revenue also beat estimates, coming in at $111.7 billion compared to the consensus of $109.57 billion. This impressive performance led to a nearly 9% jump in shares on the earnings day, pushing the stock near its 52-week highs.
The company’s recovery has been dramatic, especially considering that UNH shares had plummeted from $336 to a low of $259 by March 27, 2026. Since then, the stock has soared more than 47%, signaling a turnaround that has captured the attention of investors and analysts alike. One analyst noted, "UnitedHealth Group is on track for a business recovery and a stock price rebound that could add 50% or more to its stock price over time." This optimism is underpinned by improved medical cost management, with the medical care ratio improving to 83.9% due to enhanced cost control measures.
Berkshire Hathaway's decision to sell its entire stake in UnitedHealth has puzzled many, particularly because the investment had been made during a time of distress for the stock, when shares were acquired for around $271 each in August 2025. The conglomerate's exit comes just as the stock began to recover, raising questions about what insiders at Berkshire might know about the company's future valuation.
Market observers speculate that Berkshire's sale likely occurred near the peak of the recent rally, potentially between $376 and $394 per share. This timing has led to debates about the confidence level within Berkshire's management concerning UnitedHealth's long-term prospects. Some traders on Stocktwits expressed skepticism about the decision, with one user stating, "That means they sold between $250-$290 and completely missed the ~+55% move in just 6 weeks." The sentiment on the platform has shifted from bearish to neutral, as chatter about UNH increased by over 200% in the week following the earnings report.
Retail traders have largely dismissed Berkshire's exit as an overreaction, arguing that it occurred just before UnitedHealth's strongest rebound phase. Many traders expressed confidence in the stock's potential, with one commenting, "This is creating a nice opportunity. I’ll buy this sell-off tomorrow." Others pointed out that Berkshire's leadership transition under Greg Abel might be influencing investment decisions, with some mocking the firm's timing. "So let me understand—Medicare reimbursement rates ended up being higher, great Q1 earnings, rotation toward value and compounder names, huge institutional buying, but Abel at Berkshire is a cuck, so this dumped 30 bucks?" another trader quipped.
In addition to the earnings boost, UnitedHealth's recovery has been bolstered by its strategic focus on artificial intelligence (AI). The company has begun tracking employee usage of AI tools like ChatGPT and Microsoft Copilot, with plans to invest $1.5 billion into AI this year. CFO Wayne DeVeydt noted, "AI is advancing faster than people can appreciate or understand," highlighting the potential for improved operational efficiency through automation.
As UnitedHealth continues to navigate a changing healthcare environment, analysts will follow closely closely to see if the recent momentum can be sustained. The company faces challenges including medical inflation, regulatory pressures, and execution risks at its Optum Health segment, which reported a 3% drop in year-over-year revenues. The upcoming Q2 2026 earnings report, expected in late July, will be a key indicator of whether UnitedHealth can maintain its growth.
With a raised full-year EPS outlook to greater than $18.25, the company is signaling confidence in its ability to deliver strong results moving forward. For long-term investors, the question remains: Can UnitedHealth sustain mid-teen percentage earnings growth in this dynamic market? The answer will likely hinge on how well the company can manage costs and adapt to regulatory changes.
In the meantime, the debate over Berkshire Hathaway's decision to exit its UNH position continues to generate conversations on financial social media platforms. As retail traders weigh the implications of Berkshire's move against UnitedHealth's strong performance, the stock's future remains a topic of intense scrutiny.