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Dow's February 2025 Laggards: UnitedHealth and Salesforce

Theodore QuinnFriday, Mar 14, 2025 4:20 am ET
4min read

In the tumultuous world of stock markets, February 2025 was a month of significant turmoil for the Dow Jones Industrial Average (DJIA). While the broader market experienced a modest dip of 1.6%, two blue-chip stocks stood out as the worst performers: unitedhealth group (UNH) and salesforce (CRM). These two giants saw their stock prices plummet by 12.5% and 12.8%, respectively, leaving investors scrambling for answers.



UnitedHealth Group: A Perfect Storm of Challenges

UnitedHealth Group's woes began early in February, triggered by a now-deleted post from hedge fund manager Bill Ackman on social media platform X. Ackman questioned the health insurer's reported profits and suggested that the stock was a prime candidate for short-selling. This post, though quickly removed, sparked a wave of uncertainty among investors, leading to an initial sell-off.

The situation worsened when news broke that UnitedHealth's planned merger with Amedisys was in jeopardy. This uncertainty added fuel to the fire, as investors became increasingly wary of the potential risks and uncertainties associated with the deal. Adding to the turmoil, UnitedHealth resisted shareholders' efforts to demand more transparency regarding costs linked to delaying and denying care. This resistance further eroded investor confidence, raising questions about the company's commitment to accountability and ethical practices.

The final blow came late in the month when it was confirmed that the Department of Justice had begun investigations into UnitedHealth's Medicare billing practices. This news sent UnitedHealth's stock plummeting 13% in premarket trading on March 14, 2025, as investors grappled with the potential legal and financial implications of the investigation.

Salesforce: Disappointing Guidance and AI Hype

Salesforce's story is far simpler but no less impactful. The technology giant's stock drifted lower throughout February as investors anticipated its fiscal 2025 fourth-quarter results. When the results were finally announced, management provided disappointing revenue guidance, projecting top-line growth of 7.5% to $40.7 billion for fiscal 2026. This fell short of analysts' expectations of $41.4 billion, sending Salesforce's stock into a tailspin.

The company's artificial intelligence efforts, while compelling, have yet to make a meaningful contribution to its growth. This lack of significant AI-driven revenue was a key factor in the disappointing guidance, highlighting the gap between hype and reality in the tech sector.

Broader Implications for the Healthcare Sector

The Department of Justice's investigation into UnitedHealth Group's Medicare billing practices had ripple effects throughout the broader healthcare sector. Shares of other major insurers, including CVS Health, Humana, Cigna, and Centene, also fell sharply. This reaction indicates that investors are concerned about the potential for similar investigations and the broader implications for the healthcare insurance industry.

The regulatory scrutiny could lead to increased compliance costs, legal expenses, and potential fines for these companies, negatively impacting their financial performance and stock prices. For investors, this means that companies with strong compliance records and transparent billing practices may be seen as more stable and less risky investments, while those with potential regulatory issues may face increased scrutiny and volatility.

Tech Sector: A Tale of Two Performances

While UnitedHealth and Salesforce struggled, other large-cap technology companies in the Dow Jones Industrial Average fared much better. On the morning of March 14, 2025, shares of Apple, Nvidia, Microsoft, Alphabet, Amazon, Meta Platforms, Tesla, and Broadcom were all gaining ground. This positive performance highlights the relative underperformance of Salesforce, which was experiencing a decline in its stock price due to the disappointing revenue guidance.

TSLA Interval Closing Price
Name
Date
Interval Closing Price(USD)
TeslaTSLA
20220314-20250313
240.68


Conclusion

February 2025 was a challenging month for UnitedHealth Group and Salesforce, with both companies facing significant headwinds that led to substantial declines in their stock prices. For UnitedHealth, the combination of regulatory scrutiny, merger uncertainty, and transparency issues created a perfect storm of challenges. For Salesforce, disappointing revenue guidance and the lack of meaningful AI-driven growth were the primary culprits.

As investors navigate the complexities of the stock market, it's crucial to stay informed about the factors driving these movements. Whether it's regulatory investigations, merger uncertainties, or revenue guidance, understanding the underlying dynamics can help investors make more informed decisions and better navigate the ever-changing landscape of the Dow Jones Industrial Average.
Comments

Post
vivifcgb
03/14
$UNH Once in a lifetime chance to get in at a game changer with this huge company
0
whoisjian
03/14
$UNH not selling under Trump
0
moazzam0
03/14
@whoisjian I had $UNH once, sold too early. Regretted it when it rebounded. FOMO hits hard sometimes.
0
bigbear0083
03/14
@whoisjian How long you planning to hold $UNH? Curious if you're thinking short-term or long-term.
0
xX_codgod420_Xx
03/14
Salesforce guidance tanked. Are investors overreacting or is the writing on the wall? 🤔
0
Running4eva
03/14
@xX_codgod420_Xx Could be a buying op.
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bmrhampton
03/14
Merging with AMEDisys was UNH's albatross. Maybe time to cut losses and move on.
0
xX_codgod420_Xx
03/14
Salesforce AI hype feels like smoke and mirrors. Where's the beef? 🤔
0
CaseEnvironmental824
03/14
@xX_codgod420_Xx True, where's the tangible impact?
0
michael_curdt
03/14
@xX_codgod420_Xx AI hype can be overblown, but Salesforce is investing heavily in AI, so it might deliver surprises in the future.
0
S_H_R_O_O_M_S999
03/14
$UNH resistance to shareholder demands reeks of bad faith. Transparency isn't optional, folks.
0
curbyourapprehension
03/14
Diversify or die, that's my stock mantra.
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Roneffect
03/14
@curbyourapprehension What's your avg holding duration? Curious if you're a swing trader or long-term holder.
0
Airmang74
03/14
UNH got wrecked by Ackman's tweet, man. Short-sellers had a field day. Who trusts the headlines anymore?
0
fgd12350
03/14
@Airmang74 True, Ackman's tweet caused chaos.
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OutsidePerspective27
03/14
Tech sector's a mixed bag. $AAPL cruising while $CRM crashes. What's your play, folks?
0
elpapadoctor
03/14
AI's the new shiny object, but Salesforce better deliver or they'll keep drifting.
0
ghostboo77
03/14
Salesforce AI hype feels like a pipedream, smh.
0
Jera_Value
03/14
@ghostboo77 AI hype can be overblown, but Salesforce is still investing heavily in it.
0
DrMoveit
03/14
UNH in hot water, time to hedge bets?
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daynightcase
03/14
DOJ sniffing around UNH's billing practices? Ouch, that's some nuclear-level fallout right there.
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Rockoalol
03/14
AI hype vs. reality is a game many tech firms can't seem to level. Salesforce needs to step up or risk being left in the dust.
0
themagicalpanda
03/14
DOJ sniffing around, healthcare stocks jittery 🤔
0
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
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