Buffett's $1.57B bet on UNH sparks a 12% surge, lifting peers despite sector headwinds and recent struggles at the insurer.

UnitedHealth was a star stock late last week, when it was revealed that Warren Buffett's Berkshire Hathaway had taken a $1.6 billion stake in the company's equity. On Monday, lingering positive sentiment on UnitedHealth was boosted by that price target bump.

Berkshire Hathaway's $1.6 billion stake in UnitedHealth Group is helping to lift the Dow Jones Industrial Average to a new record as investors pile into healthcare sector funds.

Shares of UnitedHealth Group surged nearly 14% on Friday after billionaire Warren Buffett's Berkshire Hathaway bought 5 million shares of the company, providing a shot in the arm for investors who think the health conglomerate will turn around under its new CEO.

The investment comes as UnitedHealth faces soaring medical costs, federal investigations, the fallout of the killing of a top executive and a cyberattack last year.

Shares of UnitedHealth Group are surging before the market open Friday as Warren Buffett’s Berkshire Hathaway disclosed that it recently purchased shares of the beleaguered insurer.

By Mariam Sunny and Shashwat Chauhan (Reuters) -Shares of UnitedHealth Group surged more than 9% on Friday after a fresh investment from billionaire Warren Buffett's Berkshire Hathaway boosted investor confidence in the troubled health conglomerate.

Buffett owned UnitedHealth shares before selling his stake in 2010, though his Berkshire Hathaway recently acquired shares.

Berkshire Hathaway revealed four new investments Thursday in steelmaker Nucor, insurer UnitedHealth and two of the nation’s biggest homebuilders — Lennar and DR Horton — but only one of the investments was big enough to ensure that legendary investor Warren Buffett may have handled them.

UnitedHealth Group, the worst-performing stock in the Dow Jones Industrial Average so far this year, got a major boost last week from billionaire investor Warren Buffett. That doesn’t mean everyone else should buy.