Several Headwinds Pulled Down UnitedHealth Group’s (UNH) in Q2

ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Growth Strategy” second quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the growth stocks rebounded from tariff uncertainty, with technology and communication services sectors leading in the return to a risk-on environment. The S&P 500 Index returned 10.9% in the quarter, while the technology-heavy NASDAQ Composite soared 17.7%. The benchmark, the Russell 1000 Growth Index, rose 17.8% in the quarter, outperforming the Russell 1000 Value Index. Against this backdrop, the strategy underperformed its benchmark in the second quarter. IT and communication services sectors contributed to the performance while the health care sector detracted. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second quarter 2025 investor letter, ClearBridge Large Cap Growth Strategy 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 1.76%, and its shares lost 36.77% of their value over the last 52 weeks. On July 3, 2025, UnitedHealth Group Incorporated (NYSE:UNH) stock closed at $308.55 per share, with a market capitalization of $279.898 billion.

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

“The Strategy’s more diversified and defensive exposure compared to our concentrated benchmark reversed from a tailwind in a volatile first quarter to a headwind in the second quarter. We were also disappointed with the weak quarterly performance of several of our more defensive, countercyclical holdings. UnitedHealth Group Incorporated (NYSE:UNH) saw a renewed selloff in May following a first-quarter earnings miss and guidance reduction as the company announced even further elevated cost pressure and the exit of the managed care company’s CEO Andrew Witty. We had reduced some of our position in the first quarter and further reduced the position in the second quarter given limited visibility in UnitedHealth’s earnings outlook.”

Why UNH Deserves a Spot in Your Dividend Watchlist

A senior healthcare professional giving advice to a patient in a clinic.

UnitedHealth Group Incorporated (NYSE:UNH) is in 18th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 139 hedge fund portfolios held UnitedHealth Group Incorporated (NYSE:UNH) at the end of the first quarter, which was 150 in the previous quarter. While we acknowledge the potential of UnitedHealth Group Incorporated (NYSE:UNH) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered UnitedHealth Group Incorporated (NYSE:UNH) and shared the list of the S&P 500 stocks Jim Cramer recently discussed. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of 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.

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