Tepper's 1,300% Leap Into UnitedHealth Stock Chaos Looked Crazy—Until It Didn't

David Tepper's bold second-quarter buying spree in UnitedHealth Group Inc. (NYSE:UNH) is already paying off. The billionaire hedge fund manager's Appaloosa Management increased its stake in the health insurance giant by a staggering 1,300% last quarter, turning a once-minor position into his fund's second-largest holding.

• Track UNH stock here.

A Contrarian Bet On Healthcare

UnitedHealth wasn't just volatile—it was in freefall this spring, shedding more than 60% of its value between mid-April and mid-May as investors panicked over regulatory scrutiny and reimbursement uncertainty. Tepper's dramatic repositioning underscores his reputation for leaning into volatility, scooping up value in sectors others are abandoning. That move now looks prescient, with UNH stock climbing 11.5% since June 30 to close at $347.92 on Sept. 9.

At the height of the selloff, UNH stock plummeted from above $600 to the mid-$200s in a matter of weeks, a steep drop for a Dow component long considered a defensive mainstay. While many investors were cautious on healthcare stocks earlier this year amid regulatory scrutiny and cost inflation fears, Tepper went the other way.

He added 2.28 million UNH shares in the second quarter, bringing his total to 2.45 million shares at an average purchase price of $330 per share.

The stock's steady rebound since then has added validation to Tepper's contrarian instincts, which have defined his career since Appaloosa's famed distressed debt plays in the financial crisis.

Read Also:

• Hedge Fund Viking Global Dumps UnitedHealth, Loads Up On AMD, Disney, JPMorgan In Q2 Shake-Up

Now A Portfolio Cornerstone

UnitedHealth now makes up nearly 12% of Appaloosa's portfolio—a $852 million position—cementing its status as a key conviction trade.

By pouncing during peak chaos, Tepper turned panic pricing into an opportunity, effectively betting that UnitedHealth's fundamentals would outlast short-term regulatory fears.

That contrarian instinct has already paid off, with shares recovering double digits since June, turning his second-quarter buys into a portfolio-defining position.

For Wall Street, Tepper's aggressive positioning is another reminder that bold moves in defensive sectors can deliver meaningful upside – especially when backed by billionaire conviction.

Read Next:

• UnitedHealth Vs. Novo Nordisk: Which Healthcare Giant Fits Your Portfolio?

Image: Shutterstock