We just published a list of the 10 Best Dow Stocks to Buy for 2027 and UnitedHealth Group (NYSE: UNH ) ranked 8th on this list.
Yahoo Finance reported on November 5 that the Dow Jones Industrial Average tumbled 3.4%, or more than 1,800 points, while the S&P 500 fell 4.4% and the Nasdaq Composite sank 5.5% into correction territory. Chip stocks took the brunt of the damage, with AI chip designers and memory makers among the hardest hit. The slide erased the gains from a day earlier, when the Dow had jumped 3% for its best session of 2026 after Democrats won control of both chambers of Congress, Yahoo Finance wrote on November 4. By mid-session Thursday, the index was heading for its worst second day after a midterm election in data going back to 1896, the outlet noted.
The Dow's Safe-Haven Run Cracks
For most of the week, the Dow had looked like the sheltered corner of the market. Yahoo Finance reported on November 2 that the Dow edged up 0.4% while the Nasdaq dropped roughly 1% as investors rotated out of technology names and into consumer cyclical and financial services shares, which left the Dow looking like the market's relative winner. On Thursday, that cushion gave way, as the focus turned to what a Democratic Congress could mean for the AI buildout, and for the data centers driving it in particular. You might also be interested in reading our piece on how the AI chip leader's growth compares with the cloud software giant's .
The reversal was fast and violent. Shay Boloor, chief market strategist at an equity research firm, pointed out that the VIX volatility index posted its biggest one-day jump in more than two years. It took the Nasdaq just six minutes on Thursday to erase its entire post-election rally, and even Wednesday's winners such as the iPhone maker turned lower. That Wednesday buying had been helped by falling oil prices, while the Windows maker jumped 6% to a record high.
A Jobs Report Steadies the Tape
Friday brought a partial rebound. Yahoo Finance reported on November 6 that the US added 165,000 jobs in October, and the Nasdaq gained 1.9% while the S&P 500 rose 1% and the Dow added 0.1%. For a closer look at one of the biggest AI spenders caught in the sell-off, we recently covered why the search giant's low price-to-earnings ratio can mislead . The stronger jobs data lifted Treasury yields and kept Federal Reserve policy at the center of market attention, Reuters reported on November 6, as the price-weighted index of 30 major US companies held roughly flat.
UnitedHealth made the list with an average upside potential of 20%, based on analysts' average price target. It has short interest of 1.56% and had 143 hedge fund holders in Q2 2026.
UnitedHealth's pitch is a margin repair that is starting to show up in the numbers. Adjusted earnings of $4.69 per share in the third quarter were well above the year-earlier level, on revenue that was essentially flat. The medical care ratio, the share of premiums spent on patient care, fell to 88.4%, which the company tied to medical cost management, pricing discipline and changes to benefit design.
Management responded by raising its full-year adjusted earnings outlook to at least $20.50 per share and reaffirming a long-term growth target of 13% to 16%. UnitedHealthcare expects Medicare Advantage margins near the top of its range this year, and executives described 2026 as the trough for core Medicaid margins, a framing that points to gradual improvement from here.
Technology and scale give the story more support. Leaders pointed to AI tools alongside clinical care management as levers on cost, and the company is simplifying and reducing prior approvals. Optum Rx, meanwhile, now draws more than half of its members from outside customers rather than from UnitedHealthcare, which gives the pharmacy arm growth that does not hinge on the insurer's own enrollment.
Check out our analysis on UnitedHealth Group (NYSE:UNH) here: UnitedHealth (UNH): Does Optum Truly Diversify Its Earnings Risk?
While we acknowledge the potential of UNH as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock .
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