TLDR
- Warren Buffett’s Berkshire Hathaway sold 7% of its Apple stake and 4% of Bank of America in Q2 2025
- Berkshire initiated a $1.57 billion position in UnitedHealth Group, which is down 46% this year
- Apple faces tariff concerns while Bank of America trimming reflects economic caution
- UnitedHealth struggles with $6.5 billion higher medical costs and DOJ investigation into Medicare billing
- Buffett stepping down as CEO at year-end, with Greg Abel set to replace him
Warren Buffett’s Berkshire Hathaway made major portfolio changes in the second quarter of 2025, trimming positions in tech and banking while making a big bet on healthcare. The company’s latest 13F filing revealed these moves as Buffett prepares to step down as CEO at year’s end.
Berkshire sold 7% of its Apple holdings and 4% of its Bank of America stake during the quarter. Apple remains Berkshire’s largest position despite the reduction, while Bank of America holds the third spot. Over the past year, Berkshire has cut its Apple position by 30% and Bank of America by 41%.
The Apple sales come as the tech giant faces ongoing tariff issues throughout 2025. Buffett may have anticipated these challenges after President Trump’s election victory. The bank stock reduction reflects potential economic concerns, as financial institutions typically perform poorly during downturns.
Conservative Strategy Before Leadership Change
Berkshire has maintained a cautious approach during the current bull market, now in its third year. The company has been stockpiling cash and selling more stocks than it purchases. This conservative stance may prepare for the upcoming leadership transition.
Greg Abel, a longtime Berkshire veteran, will replace Buffett as CEO while Buffett remains chairman. Berkshire’s stock started 2025 strong but has declined since the transition announcement. The company has also reduced share repurchases recently.
Many investors believe Buffett sees few compelling opportunities given stretched market valuations. The strategy shift comes as the stock market continues its extended run higher.
Major Healthcare Bet
Berkshire’s biggest purchase was a $1.57 billion stake in UnitedHealth Group, the nation’s largest healthcare insurer. UnitedHealth shares have dropped 46% this year due to multiple challenges. The stock jumped nearly 9.5% in after-hours trading following news of Berkshire’s investment.
UnitedHealth faces rising medical costs across the healthcare insurance sector. Management revised its full-year outlook down to $16 adjusted earnings per share, well below Wall Street estimates. Medical costs are expected to run $6.5 billion higher than previously forecast.
The company deals with an aging population, higher service utilization, expensive treatments, rising drug prices, and inflation. These factors have pressured the entire healthcare insurance industry throughout 2025.
The Department of Justice is conducting a criminal investigation into UnitedHealth’s Medicare Advantage billing practices. The Wall Street Journal reported on suspicious billing that allegedly increases company payouts. UnitedHealth says it cooperates fully and has confidence in its practices.
Despite challenges, UnitedHealth projects double-digit revenue growth for 2025. The company maintains solid finances with operational earnings of $14.3 billion through six months, covering debt interest expense seven times over.
UnitedHealth’s dividend yield now sits at roughly 3.25%, with a trailing free-cash-flow yield above 10%. The company recently raised its quarterly dividend by 5%, showing financial strength despite current headwinds.
The stock trades at below-normal valuations given lower expected earnings and sells for less than one times revenue. Buffett likely sees value in UnitedHealth’s market position and long-term prospects in healthcare insurance.
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