Two big healthcare companies, UnitedHealth Group Incorporated (NYSE:UNH) and Intuitive Surgical, Inc. (NASDAQ:ISRG) reported earnings the same week in July. Both beat what Wall Street expected. One stock jumped as much as 8%. The other fell as much as 13%. The difference between them shows what actually moves a healthcare stock right now.
UnitedHealth Group Incorporated (NYSE:UNH): The Turnaround Is Showing Up in the Numbers
UnitedHealth Group Incorporated (NYSE:UNH) blew past expectations. Adjusted earnings hit $6.38 a share versus the $4.90 expected, and revenue rose to $112 billion, also beating estimates. The company raised its full-year profit forecast to $19.50-$20 a share, up from “more than $18.25,” a bigger raise than Wall Street hoped for. The stock climbed as much as 8% on the news.
The main number was the medical cost ratio, which measures how much of collected premiums gets spent on care. It came in at 86.7%, better than the roughly 88.5% expected and improved from 89.4% a year ago. CFO Wayne DeVeydt said the gain came from plan-design changes, higher premiums, and tighter cost management, not from healthcare costs actually falling: “These results are not a reflection of trend bending or coming under control, but rather our efforts to start pushing down what is already an elevated number.” UnitedHealth is also spending about $1.5 billion this year on AI to speed up approvals and catch billing errors and recently partnered with Anthropic, per the Wall Street Journal. Its Optum health unit swung from a 15% income decline last quarter to 29% growth this quarter.
Not everything was positive. UnitedHealth lost 525,000 members from the previous quarter and expects to lose roughly 1.6 million more by year-end, mostly as rising costs push people out of coverage. DeVeydt called that trend “not a good thing for the system long term,” even as higher prices on remaining customers offset the lost revenue for now.
Intuitive Surgical, Inc. (NASDAQ:ISRG): A Beat That Wasn’t Enough
Intuitive Surgical, Inc. (NASDAQ:ISRG), maker of the da Vinci surgical robot, also beat estimates. Revenue rose 19% to $2.89 billion, above the $2.82 billion expected, and adjusted profit hit $2.80 a share versus $2.50 expected. None of it mattered. The stock had climbed as much as 4.2% earlier in the day, then fell as much as 13% after the earnings call and stayed there into the next session, touching its lowest price in over two years. As of July 23, it’s down over 40% for the year against an 8% gain for the S&P 500.
The issue was guidance, not the quarter itself. Intuitive kept its full-year forecast range unchanged at 13.5%-15.5% procedure growth but said it now expects to land near the middle of that range rather than higher in it as previously implied, a real softening even though the range itself didn’t move. Worldwide procedure growth was nearly 15% for the quarter, down from 16% in Q1. In the U.S. specifically, it slowed more sharply, to 12% from 14%, the slowest U.S. pace in three years. CEO David Rosa said insurance and subsidy changes are pushing some patients to delay treatment, and GLP-1 weight-loss drugs are cutting into bariatric surgery volume, which fell by high single digits.
Not everyone buys the concern. Abbott had dismissed the same ACA-subsidy worry as a “flawed assumption” the day before and raised its own forecast. Evercore’s Vijay Kumar said the softness “rekindles the debate,” while Leerink’s Mike Kratky called the selloff “increasingly overblown.” At least a dozen brokerages cut price targets anyway. Adding pressure, Johnson & Johnson just won approval for its own soft-tissue surgical robot, a new competitor in a market Intuitive has dominated for two decades.
15 States with the Best Healthcare in the US
Same Week, Same Sector But Opposite Signals
If both companies beat estimates, why did one stock soar and the other plummet? Because beating last quarter matters less than what a company says comes next. UnitedHealth Group Incorporated (NYSE:UNH) raised its forecast by a wide margin, signaling its cost improvements are durable. Intuitive Surgical, Inc. (NASDAQ:ISRG) beat too but pointed to a weaker spot inside an unchanged range and confirmed that two real headwinds, i.e., insurance-driven delays in care and GLP-1 drugs cutting into bariatric surgery, were already showing up in its Q2 numbers and not just future risks. Investors reward confidence about the future far more than a solid quarter that’s already over.
Insider Monkey’s Hedge Fund Data
Insider Monkey’s hedge fund database shows both stocks losing support before either report came out. UnitedHealth Group Incorporated (NYSE:UNH) was held by 130 funds at the end of Q1 2026, down from 145, with dollar value held falling from $14.8 billion to $9.9 billion. Intuitive Surgical, Inc. (NASDAQ:ISRG) saw a similar pullback, 103 funds versus 109, with value held dropping from $9.2 billion to $8.2 billion. Both stocks were already losing hedge fund conviction before this earnings news, a sign the broader healthcare sector has been out of favor, not just these two names.
Conclusion
Same industry, same week, opposite reactions, and the lesson repeats across earnings season: a beat only matters with a reason to believe it continues. UnitedHealth Group Incorporated (NYSE:UNH) earned that belief with a guidance raise backed by real cost improvements. Intuitive Surgical, Inc. (NASDAQ:ISRG) lost investors by confirming two genuine headwinds, insurance changes and GLP-1 drugs, are already hitting its numbers before J&J’s new competition even enters the picture.
While we acknowledge the risk and potential of UNH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UNH and that has 10,000% upside potential, check out our report about this cheapest AI stock.
READ NEXT: Taiwan Semiconductor Manufacturing Company Limited (TSM) Is Raising Prices Up to 10%. Can Customers Push Back? and Alphabet and Tesla Were Punished for Heavy Spending. IBM Already Took Its Hit a Week Earlier.
Disclosure: None. Follow Insider Monkey on Google News.
