Here's Why UnitedHealth Group Incorporated (UNH) Traded Down in Q2

Fred Alger Management, an investment management company, released its “Alger Spectra Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the equities rebounded significantly following a challenging first quarter. In this environment, the fund’s Class A shares outperformed the Russell 3000 Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Alger Spectra 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 13.60%, and its shares lost 40.66% of their value over the last 52 weeks. On September 22, 2025, UnitedHealth Group Incorporated (NYSE:UNH) stock closed at $341.30 per share, with a market capitalization of $309.106 billion.

Alger Spectra Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its second quarter 2025 investor letter:

"UnitedHealth Group Incorporated (NYSE:UNH) integrates insurance benefits, primary care, pharmacy services, and data analytics, leveraging its scale to effectively address rising healthcare costs. Historically, the company has delivered strong double-digit earnings growth, driven by steady revenue expansion as more employers and payers adopt its solutions. However, this growth trajectory has recently been disrupted due to higher-than-anticipated utilization rates among Medicare Advantage (MA) members. Shares detracted from performance during the quarter after fiscal first-quarter earnings came in lower than expected, and management reduced full-year guidance, citing unexpected cost pressures from increased medical visits and specialist care early in the year. This was partly caused by higher-than-expected healthcare utilization from new MA members who had switched from competitors. In our view, profitability could improve next year as UnitedHealth and the broader MA industry implement higher pricing and government reimbursement rates adjust to reflect current utilization patterns."

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 Macquarie Large Cap Growth Fund's views on the company. 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.