Investing always requires trade-offs. For every stock bought, another stock goes unbought. And sometimes, another stock was sold to buy a stock.
That’s exactly what happened for Warren Buffett recently. The legendary investor sold around $4 billion of Apple(NASDAQ: AAPL) stock in the second quarter of 2025 and used roughly $1.5 billion of that amount to buy a beaten-down blue chip stock.
Image source: The Motley Fool.
If you haven’t already guessed, the blue chip stock Buffett bought in Q2 was UnitedHealth Group(NYSE: UNH). In a real sense, the “Oracle of Omaha” swapped iPhones for insurance.
Berkshire Hathaway‘s (NYSE: BRK.A)(NYSE: BRK.B) 13-F filing for Q2 revealed that Buffett sold 20 million shares of Apple. Since the average price for Apple during the quarter was around $202, Berkshire’s sale of the stock totaled in the ballpark of $4 billion.
What did Buffett do with the money raised from selling roughly 6.7% of Berkshire’s stake in Apple? He bought 12 stocks. Six of those purchases added to the conglomerate’s existing holdings. The other six brought new stocks into the portfolio. The biggest transaction of the bunch was UnitedHealth Group.
Buffett bought around 5.04 million shares of the health insurance giant. At the end of the second quarter, this position was worth $1.57 billion. That translates to $311.97 per share, which isn’t too much higher than UnitedHealth’s average share price during the second half of the quarter of $303. We don’t know for sure how much Buffett paid for the health insurance stock, but somewhere around that average seems likely. If so, his new stake in UnitedHealth Group cost around $1.53 billion.
Was selling another chunk of Apple a predictable move for Buffett? Probably. He sold shares in four out of six of the previous quarters. It shouldn’t have been too shocking that he trimmed Berkshire’s position in Apple a little more in Q2.
On the other hand, Apple CEO Tim Cook sat in the audience at Berkshire’s annual shareholder meeting in May. Buffett recognized Cook in the meeting and publicly thanked him for making “a lot more money” for Berkshire than Buffett himself had. He also mentioned that he listened to Apple’s most recent quarterly call, adding that it was “the only investment quarterly call that I listen to.” With those comments in mind, Buffett’s Q2 sale of Apple stock might be at least a little surprising.
However, I think Buffett’s big investment in UnitedHealth Group was completely predictable. In fact, I did predict it in an article published on July 25, 2025, nearly three weeks before Berkshire’s 13F regulatory filing was submitted, which revealed its Q2 transactions.
To be clear, my prediction didn’t require a tremendous amount of insight or Nostradamus-like psychic powers. My premise was that UnitedHealth Group was an ideal fit for Buffett’s playbook. Its insurance business is in the legendary investor’s wheelhouse. The company’s financials remain strong. The valuation was attractive. And Buffett had even owned it in the past.
There is an argument that the wiser move for Buffett would have been to stick with Apple instead of buying UnitedHealth Group. For one thing, the iPhone maker’s stock is performing much better than UnitedHealth’s this year (even though it’s in negative territory) and has been a much bigger winner over the long term.
Apple still has a phenomenal product ecosystem and a highly loyal customer base. The company could have key growth drivers on the way, possibly including a foldable iPhone and smart glasses. Rumors have suggested that Apple could acquire up-and-coming artificial intelligence (AI) companies Mistral AI and/or Perplexity. CNBC’s Josh Brown thinks a Perplexity deal could be a game-changer for Apple — and he isn’t alone in that view.
However, I think UnitedHealth Group was a better stock for Buffett to buy in Q2 and probably remains a better stock for other investors to buy now — at least over the near term. Why? I have two reasons: valuation and risk levels.
UnitedHealth’s price-to-earnings ratio is the lowest it’s been in years. Apple’s earnings multiple is a relatively high 35.8.
More importantly, I think the risk that UnitedHealth Group’s shares will remain down in the dumps is very low. The main reason the stock has plunged this year is unexpectedly high medical costs, especially with its Medicare Advantage plans. This issue will be easily resolved with higher premiums that take effect next year. The other challenge for UnitedHealth is an ongoing U.S. Department of Justice investigation. This won’t be easily (or quickly) resolved, but the company has a good track record of coming out of such probes largely unscathed.
Meanwhile, there are real risks that Apple will miss the mark with introductions of new products, just as it did with the Vision Pro mixed-reality headset and Apple Intelligence generative AI functionality. The company could also decide against a needle-moving acquisition or pay more than investors like.
I nonetheless believe that Apple is the better long-term stock to own. However, for right now, UnitedHealth Group is more of a slam dunk. And I suspect Buffett knows it.
Before you buy stock in UnitedHealth Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and UnitedHealth Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $664,110!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,104,355!*
Now, it’s worth noting Stock Advisor’s total average return is 1,069% — a market-crushing outperformance compared to 186% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
Keith Speights has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.
