This New Warren Buffett Stock is Up 25%

Warren Buffett and Berkshire Hathaway (NYSE:BRK-B) have been quite notable sellers of stocks in recent quarters. With the stock market correcting for Spring and the potential for things to worsen after a brutal “Liberation Day” that saw tariffs tank the futures of numerous major stock indices, including the S&P 500 and Nasdaq 100, it seems like Buffett was right to be a net seller of stocks.

Indeed, the Oracle of Omaha still has it! As a result, Berkshire Hathaway shares have risen as the S&P 500 plunged into a correction. While a pullback will be overdue at some point (perhaps Berkshire won’t escape the gravitational pull of Trump’s tariff day), it’s unclear how long Berkshire can keep zigging as the rest of the market zags, lower.

What’s more, some of Berkshire’s recent buys have also managed to hold their own better than your average S&P 500 name that’s off 10% or more. In a recent quarter, Berkshire Hathaway quietly picked up shares of the underrated shares of internet infrastructure and domain registrar firm VeriSign (NASDAQ:VRSN). It’s a stable and very necessary — and easy to understand — business that was going for quite cheap in the back half of last year.

This recent Buffett buy has been a notable year-to-date gainer.

Year to date, VRSN stock is up close to 25% while the S&P 500 is down closer to 4% at the time of this writing. Of course, the S&P 500 could be down far more after investors do their selling in the sessions following Wednesday’s big tariff day.

The big question that I’m sure many Buffett followers are wondering is if the easy money has already been made by VeriSign and whether the name can continue to side-step the latest Trump slump in stocks. It’s tough to tell as the VRSN stock flirts with fresh all-time highs. Either way, the timely recent buy represents just another reason to give Warren Buffett a huge round of applause as he flexes his muscles in a big way to start 2025.

VeriSign stock breaks out as stocks correct.

VeriSign’s stock chart is a thing of beauty. Shares are breaking out while the rest of the market has rolled over. Of course, the $24.2 billion internet registrar was the type of red-hot play that many rushed to buy during the ascent that preceded the dot-com bubble burst.

Zoom out to the longer-term chart and you’ll still see that spike in the late-1990s and the steep implosion in 2000. Back then, it was the internet infrastructure plays that were red-hot. Fast forward over 25 years, and it’s these firms that have become boring plays as investors rush towards the firms with the most AI promise.

Despite its steadier nature, it’s hard to overlook its robust cash flows. The company clocked in solid fourth-quarter earnings results with a side of some pretty respectable guidance. And while China was a notable headwind, I do find that VeriSign is one of those tariff-resilient plays that can keep marching higher, regardless of where President Trump decides to take tariffs — something Buffett previously referred to as “an act of war,” at least to some degree.

Apart from the stability of cash flows and relative insulation from stagflation, it’s the width of the internet juggernaut’s moat that’s striking. Just how wide is the moat? Just last year, Senator Elizabeth Warren called out VeriSign, remarking on its “monopoly power” as a top-level domain registrar — that speaks a great deal about VeriSign’s moat width, in my opinion.

Is it too late to follow Warren Buffett’s firm into VeriSign stock after it breaks out?

In any case, it’s going to be business as usual for VeriSign as it looks to keep returning ample cash back into the pockets of shareholders. Though I’m not a fan of chasing stocks after sizeable upward runs, I do view the stock as still modestly valued at 29.1 times forward price-to-earnings (P/E). Of course, you’ll be paying a Buffett premium at $255 and change. But at the very least, it’s a name that can hold its own if we are on the cusp of a trade war.

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