Here's Why Elevance Health (ELV) Traded Down in Q2

First Eagle Investments, an investment management company, released its “First Eagle Global Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Class A shares of the fund returned 7.23% in the second quarter of 2025. All regions contributed to the overall performance. North America and developed Europe were the top contributors, whereas Japan and developed Asia, excluding Japan, lagged. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, First Eagle Global Fund highlighted stocks such as Elevance Health, Inc. (NYSE:ELV). Elevance Health, Inc. (NYSE:ELV) is a health benefits company. The one-month return of Elevance Health, Inc. (NYSE:ELV) was 9.65%, and its shares lost 43.78% of their value over the last 52 weeks. On August 28, 2025, Elevance Health, Inc. (NYSE:ELV) stock closed at $310.41 per share, with a market capitalization of $69.898 billion.

First Eagle Global Fund stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its second quarter 2025 investor letter:

"Shares of Elevance Health, Inc. (NYSE:ELV), the health insurer and healthcare-services provider formerly known as Anthem, traded lower on concerns that the budget reconciliation bill working its way through Congress would negatively impact Medicaid spending, reducing Elevance volumes and margins. (The bill signed after the quarter’s end appears likely to cut Medicaid spending by about $1 trillion over 10 years.) We believe that margins will stabilize because Elevance has begun to increase premiums and should eventually cycle through the benefit of raising prices across its customer base."

Elevance Health, Inc. (NYSE:ELV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held Elevance Health, Inc. (NYSE:ELV) at the end of the second quarter, which was 75 in the previous quarter. In Q2 2025, Elevance Health, Inc. (NYSE:ELV) reported $49.4 billion of operating revenue, an increase of 14% year-over-year. While we acknowledge the potential of Elevance Health, Inc. (NYSE:ELV) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Elevance Health, Inc. (NYSE:ELV) and shared the list of cheap value stocks to buy according to Seth Klarman. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.