Buffett Bets Big on a Healthcare Comeback

When Warren Buffett steps in, markets pay attention, especially when it’s a stock that’s been cut in half.

His $1.6 billion bet could be the first chapter in one of 2025’s biggest comeback stories, and we have a setup for you.

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Intel Corp. | INTC

Price: $24.57

Intel shares jumped after reports that the U.S. government is in talks to take a stake in the chipmaker, a move aimed at bolstering domestic semiconductor production.

As the only U.S. company with the capability to manufacture leading-edge chips onshore, Intel’s strategic importance is hard to overstate.

The stake, if confirmed, would help fund its new Ohio factories and could be a catalyst for restoring investor confidence after a rough two years.

Despite losing 60% of its market value in 2024, Intel is up nearly 20% this year.

Its foundry business still lacks a marquee customer, but government backing could accelerate its turnaround in both AI and traditional chip manufacturing.

The recent leadership change to CEO Lip-Bu Tan has already brought operational focus, with cost-cutting measures and the cancellation of underperforming projects in Europe.

Why It Matters:
A government equity stake could position Intel as a national champion in chips, much like the role Boeing plays in aerospace.

For investors, this could mean a steadier revenue base, potential valuation re-rating, and reduced downside risk in an industry prone to cyclical swings.

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Eli Lilly & Co. | LLY

Price: $701.25

Eli Lilly is raising prices for its blockbuster weight loss drug Mounjaro in the U.K. by up to 170%, a strategic move that aligns with President Trump’s demand for U.S. drugmakers to shift costs abroad to lower domestic prices.

The increase, from £122 to £330 per month at the highest dose, comes as the company navigates multiple headlines, from strong Q2 earnings to legal scrutiny in Texas over alleged provider incentives.

Financially, Lilly remains one of the most valuable pharmaceutical companies in the world, with a $647B market cap, 44.7 P/E ratio, and consistent dividend growth.

The company’s pipeline is rich, but recent trial results for its oral GLP-1 candidate Orforglipron disappointed, leading analysts to trim price targets while maintaining bullish ratings.

Insider buying by Director Ralph Alvarez underscores management’s long-term confidence.

Why It Matters:
Lilly’s aggressive price realignment could set a precedent for how U.S. pharma navigates political pressure on drug costs.

While short-term volatility is likely, the company’s leadership in the weight loss and diabetes markets provides a strong fundamental backdrop.

Deere & Co. | DE

Price: $488.98

Deere beat Q3 earnings expectations with EPS of $4.75 and revenue of $10.6B, topping forecasts despite a 9% year-over-year decline in sales.

Precision agriculture products and new tech offerings like JDLink Boost helped offset weaker demand in core segments.

Still, the stock sold off after the report, reflecting investor caution over broader market conditions and valuations.

Deere’s fundamentals remain strong: 55 consecutive years of dividend payments, manageable debt, and robust cash flow guidance.

Management reiterated its $4.75–$5.25B full-year net income target and highlighted long-term demand drivers, including renewable fuels and trade policy tailwinds.

However, tariffs are expected to cost $600M this year, and analysts anticipate cautious ordering patterns in early 2026.

Why It Matters:
Deere is navigating a cyclical slowdown without losing sight of its tech-driven growth path.

For investors, the sell-off could present an opportunity to buy a market leader in agricultural innovation at a relative discount.

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Applied Materials Inc. | AMAT

Price: $161.76

Applied Materials topped Q3 expectations with EPS of $2.48 and revenue of $7.3B, fueled by strength in AI-related semiconductor demand.

Gross margin improved to 48.9%, and free cash flow hit $2B, underscoring the company’s ability to convert growth into profitability.

Despite the beat, shares fell in both regular and after-hours trading as management guided Q4 revenue lower, citing softness in China and uneven leading-edge logic investments.

With a $151B market cap and 21 straight years of dividends, AMAT is positioned as a backbone supplier for the semiconductor ecosystem.

The company is expanding capacity in DRAM and logic segments, betting that AI adoption will drive sustained demand for its tools and technologies.

Why It Matters:
The stock’s post-earnings dip may be more about sentiment than fundamentals.

AMAT’s role in enabling the AI supply chain keeps it at the center of one of the decade’s strongest secular growth trends.

UnitedHealth Group Inc. | UNH

Price: $304.18

UnitedHealth has endured a brutal 2025, with shares nearly halving before this week’s surprise: Warren Buffett’s Berkshire Hathaway disclosed a $1.6B stake.

The investment comes despite, or perhaps because of, the insurer’s well-publicized challenges, including a DOJ probe into Medicare billing, a leadership shake-up, and a sharply reduced earnings outlook.

Berkshire’s move triggered a double-digit after-hours jump, signaling that some investors view the selling as overdone.

With a forward P/E under 12 and a 3.26% dividend yield, UNH now trades at a valuation rarely seen for a company of its scale.

Its balance sheet and market position as the largest U.S. private health insurer remain intact, and a recovery could be swift if legal overhangs clear.

Why It Matters:
Buffett’s track record in buying quality franchises at moments of distress is legendary.

While regulatory risks remain, UNH’s valuation and market leadership make it a potential long-term winner for patient investors.

This week’s stories highlight a market willing to reward strategic pivots, whether it’s Intel securing government backing, Eli Lilly reshaping its pricing playbook, or Berkshire spotting value in a battered healthcare giant.

Cyclical headwinds and policy uncertainty remain, but for disciplined investors, moments like these often mark the start of the next opportunity cycle.

Stat of the Day
0.9% — The Producer Price Index, a key wholesale inflation gauge, surged in July at its fastest monthly pace since March 2022, reflecting broad-based cost pressures from goods to services.

Economists see the data as a potential headwind for the Fed’s inflation target, but also a window into the pricing power companies hold in a shifting trade environment.