Berkshire’s Healthcare Bet Soured: UnitedHealth Decline Triggers $267 Million Unrealized Loss

Berkshire Hathaway initiated its position of 5,039,564 shares during the second quarter of 2025, signaling a contrarian move after the stock had already fallen from its 2024 highs of nearly $600. While the exact purchase prices remain undisclosed, the stake was valued at roughly $1.57 billion when first reported. However, as of late March 2026, the stock has slumped to $259.02, falling well below the $311 level recorded at the end of the 2025 second quarter. This decline has resulted in an estimated unrealized loss of $267 million for Berkshire, marking a rocky start for its first meaningful ownership of the insurer since 2010.

The downturn is rooted in a "perfect storm" of rising medical costs and regulatory scrutiny that intensified throughout 2025. UnitedHealth’s medical care ratio—a key metric of profitability—spiked toward 89% as the company grappled with higher-than-expected claims in its Medicare Advantage business and a surge in deferred post-pandemic care. These pressures forced the company to suspend its 2025 earnings guidance in May of that year and led to a leadership transition, with former chief Stephen Hemsley returning to replace Andrew Witty.

Further weighing on investor sentiment is a Department of Justice investigation into potential Medicare fraud and billing practices. While the stock currently shows signs of being technically oversold with a 14-day Relative Strength Index (RSI) of 27.5, it remains firmly below its 50-day and 200-day moving averages. Despite the volatility, Wall Street sentiment remains cautiously optimistic; in recent sessions, analysts at firms like UBS and JPMorgan have maintained positive ratings, though they have notably lowered their price targets—to $410 and $389 respectively—reflecting a more sober outlook on the company’s recovery timeline.