VeriSign (NASDAQ:VRSN), the largest internet stock held by Berkshire Hathaway, has been spotlighted as a “top pick” for 2025 by Citi analysts.
What Happened: In the closing days of 2024, Berkshire Hathaway, under the leadership of Warren Buffett, augmented its stake in VeriSign. With a $2.7 billion stake, Berkshire Hathaway has emerged as the largest shareholder of VeriSign, boasting nearly 14% ownership.
VeriSign, established in 1995, offers domain registration and listing services and is a key player in operating internet infrastructure. It holds the exclusive registry for .com and .net domains and runs two of the 13 global internet root servers.
According to a report by Business Insider, Citi analysts have projected a promising 2025 for VeriSign, setting a $238 price target, which indicates a potential upside of 16% from the current levels. In an optimistic scenario, Citi predicts the stock could escalate to $312, suggesting a potential upside of over 50%.
“We view Verisign as being one of the safer plays in Internet with a narrower range of outcomes given its almost utility-like nature as a domain registry, ability to pass on regular price increases that leads to a resiliant top-line, and best in class EBITDA margins, providing what we believe to be an attractive risk/reward for investors,” the Citi analyst told the outlet.
Also Read: How Warren Buffett Decides When To Sell a Stock: ‘If the Competitive Advantage Disappears…We Sell’
VeriSign ranks among the top five most profitable companies in the S&P 500, securing the fifth position for the highest profit margin and third for operating margin. Citi has expressed positivity regarding the recent month-over-month growth in .com domain registrations, which could signify year-over-year growth in 2025.
Despite a tough year, with the stock experiencing a mere 2% rise compared to a 23% gain for the S&P 500, Citi maintains that VeriSign’s current valuation positions it as a top stock pick for 2025.
Why It Matters: The endorsement from Citi comes as a significant development for VeriSign.
The company’s performance and Berkshire Hathaway’s increased stake in it underline its potential for growth. With the internet domain industry expected to expand, VeriSign’s exclusive rights to .com and .net domains could further bolster its position.
The company’s high profitability and Citi’s optimistic projections make it a stock to watch in 2025.
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