Greater than 15 years in the past, hedge fund supervisor David Tepper pulled in a $7 billion revenue by backing Financial institution of America and Citigroup within the midst of the nice monetary disaster. His funding in these banks ran counter to the frequent knowledge on the time – however it completely encapsulated his contrarian method to investing.
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Tepper, who based hedge fund Appaloosa Administration in 1993 and has a private fortune north of $21 billion, has all the time held to 2 most important ideas: hunt down worth, and don’t fear in regards to the frequent knowledge. Market sentiment performs no function in his funding technique; he seeks out shares which are undervalued and ignored by the mass of buyers – however that additionally supply sound fundamentals and the prospect of a turnaround.
This technique has led Tepper to purchase large into surprising shares prior to now – and extra not too long ago, he has caught to his contrarian weapons. A have a look at his most up-to-date filings, overlaying 2Q25, reveals that UnitedHealth (NYSE:UNH) and Intel (NASDAQ:INTC) have each attracted his consideration, whilst the businesses confronted huge headwinds.
We’ve opened up the TipRanks database to get a really feel for each of those shares – to see how the Road thinks about them, and to get an concept of why Tepper is shopping for in so closely.
UnitedHealth Group
We’ll begin within the medical health insurance business, with UnitedHealth. This agency, with its market cap of $278 billion and its buyer base numbering 148 million sturdy globally, is the biggest operator within the US well being protection area. UnitedHealth has been within the enterprise since 1974, and took on its present title in 1978. The corporate employs over 400,000 individuals, in the whole lot from administrative features to direct care workers.
UnitedHealth’s enterprise is cut up between two most important areas of operation, the insurance coverage facet and the direct care facet. On the insurance coverage facet, the corporate provides a variety of affordably priced well being profit and insurance policy. These insurance policies embrace choices for people and for employer profit packages. UnitedHealth can also be a serious participant within the Medicare and retirement sector, and provides packages for neighborhood and state profit plans.
Turning to the direct care facet, we have a look at Optum, UnitedHealth’s supplier section. Beneath this aegis, the corporate gives direct-care well being providers for quite a lot of audiences, in a patient-centered method. The corporate prioritizes high-quality, community-based care providers, and consists of psychological well being providers in its packages. The corporate’s Optum Perception department works with suppliers, payers, and authorities companies, in addition to life-sciences corporations, to develop service plans and fee choices that simplify the executive and monetary ends. The corporate additionally gives pharmacy providers, below Optum RX, for reasonably priced medicine choices.
The US healthcare sector is a large enterprise, and UnitedHealth has in recent times been increasing its income share. In 2023, the corporate generated a prime line of $371.6 billion; this elevated to $400.3 billion final 12 months, and for the 12 months together with 2H24 and 1H25, UnitedHealth noticed a complete of $422.8 billion in income.
Regardless of these good points, UNH has seen share worth drop sharply this 12 months – the year-to-date decline is presently 38.5%. The corporate has confronted critical headwinds for the reason that spring, when its 1Q25 report included a downward revision to the full-year 2025 income steerage, which was then adopted by the corporate fully taking its information off the desk. The share worth suffered one other blow when the corporate confirmed that its Medicare billing practices have come below scrutiny from the Division of Justice. The corporate’s assertion included affirmation that UNH is now complying with each civil and prison investigations.
Usually, that kind of admission from a serious firm would make big-name buyers assume twice, however that is precisely the kind of scenario that will get Tepper’s consideration. Tepper is a contrarian, and he focuses on shares which are struggling a worth decline however retain sound fundamentals.
With this in thoughts, in Q2, Tepper elevated his UNH stake considerably, shopping for 2,275,000 shares. Tepper’s stake in UnitedHealth now totals 2.45 million shares, price roughly $753 million.
Once we have a look at UnitedHealth’s final earnings launch, for 2Q25, we discover that the corporate had $111.6 billion in quarterly income, rising 13% year-over-year and assembly Road expectations. On earnings, UNH realized a non-GAAP EPS of $4.08, which missed the estimates by 37 cents per share. We must always word that within the quarterly report, the corporate reinstated its 2025 income information, calling for income between $445.5 billion and $448.0 billion.
Regardless of current headwinds, wanting forward, Cantor analyst Sarah James thinks UnitedHealth presents sturdy potential for buyers, though she maintains a cautious stance. James writes, “We imagine we’re at a turning level for UNH, with ’25-27 EPS progress achievable & baking in applicable danger. We imagine steerage was deliberately set low for 2025 and 2026/2027 commentary to permit the corporate to return to earnings predictability and a beat-and-raise sample. That mentioned, we’re additionally protecting our estimates conservative to respect the unpredictability of a number of finish markets impacted by coverage modifications, the turnaround wanted in a number of segments, and new price development commentary that appears to be extra bearish than friends on a number of segments.”
Quantifying her take, James put an Obese (i.e., Purchase) ranking on the inventory, with a $440 worth goal that implies a possible one-year upside of 43%. (To observe James’s observe document, click on right here)
This medical health insurance big has picked up 20 current analyst evaluations from the Road, and the breakdown of 17 Buys, 2 Holds, and 1 Promote provides the inventory a Sturdy Purchase consensus ranking. That mentioned, the inventory is presently priced at $307.42 and its $314.95 common worth goal implies the shares will keep rangebound in the interim. (See UNH inventory forecast)
Intel
Subsequent on our listing of Tepper picks is Intel, one of many best-known names on the planet of semiconductor chips. Whereas not in the identical league as business chief Nvidia, the corporate nonetheless boasts a decent market cap of $108.5 billion and controls almost 75% of the market share for PC microprocessor chips. The corporate constructed itself up on that area of interest and is the main supplier of x86 chips for desktop and laptop computer PCs; in case you’ve purchased a pc not too long ago, there’s a powerful probability that it has the blue-and-silver ‘Intel Inside’ sticker on it.
Intel gives us with a case research, nevertheless, in why a tech agency can’t stand nonetheless, even on a profitable product line. The corporate was based in 1968, and from the 90s into the mid-2010s, the corporate led the business in annual income. Even at the moment, with $53 billion in 12-month income via 2Q25, the corporate nonetheless ranks fifth globally and third within the US amongst its friends. By market cap, nevertheless, Intel has fallen out of the highest ten and ranks #17 globally. The agency’s decline has two roots: first, the AI increase prompted business leaders to shift towards AI-capable chips, and Intel is conspicuous as a latecomer to that area; and second, competitor AMD, whose $272 billion market cap gives a lot deeper pockets, has been making a critical problem to Intel within the desktop processor market.
We must always word that Intel has been growing new merchandise for the AI market, with chipsets designed for AI cloud and AI-capable PC methods. In a transparent signal that administration is trying to change focus, the corporate introduced on former Cadence CEO Lip-Bu Tan earlier this 12 months as the brand new CEO, with plans to fulfill the challenges offered within the chip market by the AI increase and by elevated competitors.
On one other word, one which has generated controversy, Intel has additionally secured sturdy monetary backing from the US authorities, which not too long ago confirmed an infinite $11.1 billion funding within the firm. Whereas the money infusion is undoubtedly welcome from Intel’s finish, and is according to the Trump Administration’s dedication to selling US corporations and to onshoring US high-tech manufacturing, the transfer may also deliver politics into Intel’s enterprise resolution processes. The transfer provides the US authorities a ten% stake in Intel.
We also needs to word that Japan’s Softbank has purchased closely into Intel, with a $2 billion funding within the firm.
These massive governmental and institutional investments assist to spotlight the truth that Intel’s inventory has not been engaging in recent times. Sure, the inventory has gained this 12 months, however the shares are nonetheless down over the long run, with a five-year drop of fifty%.
And now we come to David Tepper. The contrarian billionaire purchased 8 million shares of the chip maker throughout 2Q25. This inventory acquisition marked a brand new place for Tepper, and his stake within the firm is valued at $198.4 million.
5-star analyst Gus Richard, from Northland, covers Intel, and whereas he acknowledges that the corporate has a tough path to reverse its fortunes, he believes that the trail does exist. In his word on the inventory, Richard writes, “Intel’s turnaround stays unsure, however we imagine INTC has a variety of expertise and levers to execute its turnaround. Subsequent 12 months, INTC might be in the identical zip code as TSMC, sharing related course of expertise and, together with TSMC, might be a frontrunner in superior packaging. INTC can leverage these capabilities to change into a SiP package deal foundry.”
Following from this, Richard charges INTC as Outperform (i.e., Purchase). He enhances that with a $28 worth goal that factors towards a one-year share worth achieve of 13%. (To observe Richard’s observe document, click on right here)
That’s positively the bullish take. The 29 current evaluations on this inventory embrace that single Purchase together with 25 to Maintain and three to Promote, for a Maintain consensus ranking. The shares have a buying and selling worth of $24.80, and the $22.17 common worth goal implies that the inventory will slip 10.5% within the subsequent 12 months. (See INTC inventory forecast)
To search out good concepts for shares buying and selling at engaging valuations, go to TipRanks’ Greatest Shares to Purchase, a software that unites all of TipRanks’ fairness insights.
Disclaimer: The opinions expressed on this article are solely these of the featured analysts. The content material is meant for use for informational functions solely. It is vitally vital to do your individual evaluation earlier than making any funding.
