UNH stock: Why are UnitedHealth Group shares surging over 11% today? It's because of this big reveal

Fast Company

15 hours ago

Shares in the troubled private health insurer UnitedHealth Group (NYSE: UNH) are currently seeing their best trading day in months. As of the time of this writing, UNH shares are up nearly 11.8% to $303.94 in pre-market trading.
Yet the company, which is under federal criminal and civil investigations for alleged irregularities in its Medicare business, hasn't announced any fundamental changes to its business—no revised upward outlooks or hints that its operational costs are decreasing. So why then are UNH shares surging this morning? It mainly comes down to one man: Warren Buffett.
The Warren Buffett effect
Warren Buffett is the most legendary investor in America, and when his company, Berkshire Hathaway, buys shares in another company, investors take notice. And that's exactly what's happened with UNH shares.
In a regulatory filing with the Securities and Exchange Commission (SEC), Berkshire Hathaway has revealed that the Warren Buffett-led firm acquired a significant position in UNH in June. As noted by CNBC, Berkshire Hathaway purchased more than 5 million shares of UNH in June, worth about $1.6 billion.
Now that that stake has been revealed, other investors are buying into UNH, likely hoping both to ride the Warren Buffett effect and also hoping that Buffett is correct in whatever he sees in the stock that has led Berkshire Hathaway to make such a large investment.
One of the tactics Buffett, who is known as the 'Oracle of Omaha,' has used to buy stocks in the past is to invest in companies when they are down. It's a strategy many investors use: buy stocks when they are depressed, hoping they will rise in the future when the company overcomes whatever challenges it is facing and investor sentiment warms.
UNH shares have still had a horrible 2025
Of course, UnitedHealth Group is facing more challenges than most companies right now. After the killing of its subsidiary's CEO, UnitedHealthcare's Brian Thompson, in December 2024, there was large blowback from the American public against UnitedHealth. Americans under UnitedHealth plans voiced their frustrations about their difficulties in getting medical appointments or treatments approved by the private insurer, not to mention the crippling medical costs they face even if their treatments are approved.
The private insurance giant has also faced rising costs as more elderly Americans who delayed elective procedures during the Covid-19 pandemic are now returning to hospitals to get surgeries, such as hip and knee replacements.
In May, UnitedHealth Group's CEO, Andrew Witty, announced he was stepping down. And in July, the company confirmed that it was under federal criminal and civil investigations for alleged irregularities in its Medicare business, as well as revised its 2025 full-year fiscal outlook downward.
Before today's pre-market boost to its stock price, UNH shares had trended down for a long time. As of yesterday's market close, UNH shares were down over 46% year-to-date. Over the past 12 months, shares have been down over 53%.
While the nearly 12% rise in UNH's share price this morning is giving the stock a much-needed boost, the company is still facing the same problems it was before Berkshire Hathaway's stake was revealed.