12 Best Long-Term Stocks to Buy According To Warren Buffett

8. VeriSign, Inc. (NASDAQ:VRSN)

Warren Buffett’s First Major Purchase: 2012

Berkshire Hathaway’s Latest Investment Stake: $2.28 Billion

Number of Hedge Funds Holding Stakes as of Q2: 36

VeriSign, Inc. (NASDAQ:VRSN) is a stock that diversifies Buffett’s holdings into the technology sector. It is a software infrastructure company that offers domain name registry services and internet infrastructure, enabling internet navigation for worldwide recognized domain names.

The company exited the second quarter with 351.5 million domain name registrations across all top-level domains. The milestone cemented the company’s revenue base as it generates fees from the domains annually.  Holding a nearly monopolistic position in its sector, meticulous management of its operations, and a steady flow of cash income, the rationale for Buffett’s acquisition of Verisign remains fundamentally sound.

Between 2020 and 2023, VeriSign, Inc. (NASDAQ:VRSN) ‘s revenue grew at a compound annual growth rate (CAGR) of 6%, while its earnings saw a steady 4% growth. Its revenue and earnings are anticipated to rise by 5% and 1% in the current year. These growth rates affirm why it is one of the best long-term stocks to buy, according to Warren Buffett.

The company delivered another solid quarter, both operationally and financially, with revenue up by 4% to $387 million and operating income increasing to $266 million from $249 million as of last year’s same quarter.

It’s doubtful that the internet will soon disappear, and its significance to commerce. VeriSign, Inc. (NASDAQ:VRSN) ‘s core business of providing domains remains intact and should continue growing regardless of prevailing macroeconomics.

In the second quarter of 2024, 36 out of the 912 hedge funds part of Insider Monkey’s database were the firm’s shareholders. VeriSign, Inc. (NASDAQ:VRSN)’s largest hedge fund shareholder is Warren Buffett’s Berkshire Hathaway through its $2.28 billion stake.

In its Q1 2024 investor letter, Baron Asset Fund discussed VeriSign, Inc. (NASDAQ:VRSN) as follows:

“VeriSign, Inc. (NASDAQ:VRSN), a global provider of internet infrastructure and domain name registry services, manages the .com and .net domains. Shares of VeriSign declined because of continued weakness in new domain registrations, stemming largely from weaker demand in China. We believe that VeriSign maintains an exceptional competitive position and the contractual ability to raise prices. Longer term, we are encouraged by VeriSign’s opportunity to win the rights to administer the “.web” domain, produce substantial free cash flow, and generate attractive capital returns as it continues to prioritize share buybacks.”