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.
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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.
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