The mood changed during the most recent quarter. UnitedHealth reported adjusted earnings of $7.23 per share and $111.72 billion in revenue, a 2% year-over-year increase that easily exceeded even the most optimistic Wall Street projections. Reading the report gave me the impression that management was trying to make a point. In a single breath, they increased the full-year EPS guidance twice, from $17.10 to $17.35, with adjusted figures rising to $18.25. Traders took notice. At the opening, the stock increased by over 9%, and it continued to rise throughout the afternoon.

There are multiple factors that contribute to the confidence. It’s a combination, the kind of alignment that is uncommon in the medical field. In 2027, the Centers for Medicare & Medicaid Services decided to raise Medicare Advantage payment rates by 2.48%, which was more than most analysts had projected. With Medicare Advantage at the center of its operations, UnitedHealth stands to gain a significant portion of the approximately $13 billion that is anticipated to flow into the larger system from that alone. The policy tailwind might be more significant than the actual earnings gain.

The Buffett factor comes next. In addition to adding a well-known name to the list of shareholders, Berkshire Hathaway’s acquisition of more than 5 million UNH shares last year indicated—quietly, as Buffett has done—that the wounds of 2025 were only temporary. The speed at which institutional sentiment changed following that revelation is difficult to ignore. It was once again possible to watch the stock. This week, Jefferies increased its price target from $340 to $373 while maintaining its Buy rating.

The company is obviously a different animal than it was a year ago behind the numbers. Investors were informed by CFO John Rex that the company’s $1.5 billion artificial intelligence program is already yielding returns, with positive contributions within a year, and that every major segment outperformed internal expectations. Optum Health’s adjusted earnings were $1.3 billion. Avery, a generative AI assistant, has been implemented throughout the care network. Additionally, before the end of the quarter, the company intends to buy back at least $2 billion in stock.

It’s worth stopping here, though. Growing medical expenses have persisted. Investigations into everything from billing practices to antitrust issues are part of the ongoing regulatory scrutiny that followed the industry through 2025. In this industry, margins quickly compress if claims trends increase more quickly than reimbursement. No AI rollout truly resolves that structural tension.

However, the market appears eager to move forward for the time being. The medical care ratio, a tiny figure with significant ramifications, increased to 83.9% from 84.8% the previous year. CEO Stephen Hemsley has shifted the company’s focus back to U.S. healthcare, left overseas operations, and reorganized the leadership. As this develops, it seems less like a victory lap and more like a business that has finally realized its strengths. It’s still unclear if that will be sufficient to move UNH past the $400 resistance level, which traders continue to circle.

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