Multiple Challenges Hit UnitedHealth Group (UNH) in Q2

Macquarie Asset Management, an investment management company, released its “Macquarie Large Cap Growth Fund” investor letter for the second quarter of 2025. A copy of the letter can be downloaded here. The second quarter of 2025 endured significant government policy changes and geopolitical events, which resulted in volatility yet ended with robust performance for equity markets. The Fund’s Institutional Class shares posted an absolute positive return of 11.24% in the quarter, but underperformed the benchmark, the Russell 1000 Growth Index, which returned 17.84%. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its second-quarter 2025 investor letter, the Macquarie Large Cap Growth Fund highlighted stocks such as UnitedHealth Group Incorporated (NYSE:UNH). UnitedHealth Group Incorporated (NYSE:UNH) is a diversified healthcare company that operates through UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx segments. The one-month return of UnitedHealth Group Incorporated (NYSE:UNH) was 10.44%, and its shares lost 41.28% of their value over the last 52 weeks. On September 19, 2025, UnitedHealth Group Incorporated (NYSE:UNH) stock closed at $336.69 per share, with a market capitalization of $304.931 billion.

Macquarie Large Cap Growth Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its second quarter 2025 investor letter:

"At a stock level, the largest detractors were UnitedHealth Group Incorporated (NYSE:UNH), an underweight to Broadcom Inc., and our position in Waste Connections Inc. UnitedHealth is the largest health insurance company in the US. The company has achieved this status through long-term innovation and strong execution – qualities we believe remain integral to its operations today. Recently, however, UnitedHealth has encountered challenges on multiple fronts. These include higher utilization (such as increased doctor visits, tests, and treatments) from members and newer members being incorrectly “coded” for their true health risk. This coding issue has resulted in a mismatch with actual reimbursement being temporarily below member utilization. These factors pressured the company’s margins. We expect these issues to self-correct over time as the company adjusts premiums and the level of benefits, and contracts to more appropriate levels. While we were aware of these headwinds, we underestimated the magnitude of their impact."

UnitedHealth Group Incorporated (NYSE:UNH) is in 18th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 159 hedge fund portfolios held UnitedHealth Group Incorporated (NYSE:UNH) at the end of the second quarter, which was 139 in the previous quarter. In the second quarter of 2025, UnitedHealth Group Incorporated (NYSE:UNH) reported revenues of nearly $112 billion, up 13% over the prior year’s quarter. While we acknowledge the potential of UnitedHealth Group Incorporated (NYSE:UNH) 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 UnitedHealth Group Incorporated (NYSE:UNH) and shared the list of stocks Jim Cramer discussed recently. 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.