Smart Investor: Undervalued Stocks That Crushed Earnings, Berkshire’s UnitedHealth Buy, and a New Record for Stocks

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This week’s highlights:

• Weekly Market Update: Healthcare Stocks Lead Market Gains
• 10 Undervalued Stocks That Crushed Q2 Earnings
• 10 Stocks with the Largest Fair Value Estimate Increases During Q2 Earnings
• Berkshire Hathaway Buys UnitedHealth and Reveals Mystery Stocks
• UnitedHealth: Berkshire Hathaway Announces Initial, Large Stake in Beleaguered Stock
• July CPI Report: Tariffs Continue to Stoke Inflation

The Morningstar US Market Index gained another 1% this past week, grinding out a fresh record high. Stocks are now up more than 10% in 2025, a stronger performance than many investors expected. While the rally is surprising, it’s probably not fair to say the market is defying gravity, since valuations aren’t particularly attractive. Meanwhile, evidence is building that tariffs are taking a toll on the economy, whether through weaker job growth or higher inflation that will gradually pinch consumers.

But earnings growth fuels the stock market, and on that front, the backdrop has been supportive. Using the US Market Index as a benchmark, earnings are on track to grow nearly 13% in the second quarter, the second-highest rate in over three years. This past week, Bella Albrecht took that data and screened for stocks that have crushed earnings which our analysts think are undervalued. The list of 10 names includes pharma stocks and a leader in online betting.

Along with that earnings growth, Morningstar analysts have raised fair value estimates by a solid amount, especially among technology and communications services stocks. We dug into the numbers and screened for stocks with the largest fair value estimate increases since earnings season started. Check out the list here.

Among the notable events this past week, Berkshire Hathaway released its SEC filing detailing its stock holdings. The report lived up to expectations when Berkshire unveiled a new position in battered insurer UnitedHealth and three other “mystery stocks” the company had been quietly buying. That was good for a hefty gain of nearly 13% in UnitedHealth stock, its biggest one-day rally since 2008. Here’s Morningstar senior equity strategist Julie Utterback’s take on Berkshire’s stake in UnitedHealth.

As always, be sure to visit our Markets page for our latest coverage and live stock market updates along with our full weekly calendar of key upcoming data and events.