Sirius XM (SIRI.US), a small-cap stock, was heavily bought by hedge fund billionaire, with a violent surge of 18% in the pre-market.

Shares of Sirius XM (SIRI.US), a US-based satellite and internet radio broadcaster, surged more than 18% in pre-market trading on Thursday, to as high as $34.50, before closing around 7% higher, after Warren Buffett's Berkshire Hathaway Inc. (BRK.US) disclosed it had increased its stake in the company by 262.24% in the second quarter.

Berkshire Hathaway, the company led by "Oracle" Warren Buffett, disclosed it had increased its stake in the radio company by 262.24% in the second quarter, according to a 13F filing.

Sirius XM is a well-known US radio broadcaster that provides subscription-based radio services through satellite and internet. The company offers a wide range of audio content, including music, talk shows, sports and news.

Sirius XM is known for its widespread use in car entertainment systems and is one of the major satellite radio providers in the US market. It attracts subscribers with exclusive content and personalized station options.

Sirius XM is not a stock that is particularly favored by hedge funds, and some investors in popular US online forums have never heard of the stock.

Sirius XM's share price has fallen 46.8% since the beginning of the year, and about 23% in the past month.

Some analysts believe that Sirius XM's share price has fallen significantly in 2024, and that Buffett may see the stock as undervalued and offer a good long-term investment opportunity, given its stable subscription revenue stream.

The company reported second-quarter earnings in line with market expectations earlier this month, but revenue declined slightly due to subscriber losses in two core segments.

Wall Street analysts have a neutral average rating on the stock, in line with SA Quant's hold rating, but Wall Street's average target price for Sirius XM is $37.80, implying potential upside of 30% over the next 12 months.