Warren Buffett is widely regarded as one of the best investment managers in the world. He has the track record to back up that reputation, too. The Oracle of Omaha produced an average return of 27.4% per year from 1957 through mid-1965 for Buffett Partnership Ltd. He continued to run the partnership for a few more years before paying out partners' shares of Berkshire Hathaway (BRK.A 0.31%) (BRK.B 0.30%), which had already begun its journey of compounding at 20% per year for six decades to follow under Buffett's leadership.
Today, Berkshire Hathaway sports a market cap exceeding $1 trillion, the majority of which stems from its investable assets. Berkshire's marketable equity portfolio is worth about $287 billion as of this writing. But it's about to get a bit smaller, as Buffett has agreed to sell one of the portfolio's longtime holdings after the stock climbed 48% from the start of the year.
Image source: The Motley Fool.
Buffett's next big stock sale
Buffett has been decreasing Berkshire's exposure to publicly traded equities for a few years. In fact, he's been a net seller of stocks for 11 straight quarters. In that time, he's raised roughly $177 billion in net stock sales. As a result, Berkshire's cash and Treasury bill holdings climbed to a whopping $344 billion.
Only a handful of Buffett's biggest investments have been safe from the chopping block. The biggest sales came from slashing Apple and Bank of America, which arguably have become overpriced and overweighted in Berkshire's portfolio.
Buffett cut roughly two-thirds of Berkshire's Apple stake, yet it remains the portfolio's largest holding by a substantial margin. Buffett's move appears smart in hindsight, as the stock has traded sideways over the past year. Bank of America, on the other hand, continued to climb higher, as interest rates remain elevated, giving it a chance to reprice long-duration loans and securities, boosting its net interest income.
Both Apple and Bank of America are relatively long-term holdings for Berkshire, dating back to 2016 and 2011, respectively. The most recent longtime holding on Buffett's sell list is Verisign (VRSN -0.17%), which Berkshire originally purchased in 2012. It even added to that stake earlier this year.
But Berkshire Hathaway has agreed to sell 4.3 million shares of the stock at a price of $285 each in a deal underwritten by JPMorgan Chase. The sell price represents a discount from where the stock traded prior to the announcement, but a 39% premium to where Berkshire bought the stock most recently, on Jan. 3.
There are a few important details to note about Berkshire's Verisign sale. The sale is designed to put Berkshire's stake in Verisign below the 10% threshold, which requires additional Securities and Exchange Commission (SEC) disclosures and regulatory burdens. Part of the agreement is that Berkshire will hold on to its remaining shares for at least 365 days. That means it still holds a significant amount of shares and intends to do so for the foreseeable future.
That may leave some investors wondering whether they should follow Buffett's lead and sell Verisign or if it's worth continuing to hold or even buy at its current price.
A closer look at this internet monopoly
Verisign owns the exclusive rights to register websites with the .com or .net top-level domains. That's an incredibly envious position to be in and it's unlikely to change anytime soon.
Its contract with the Internet Corporation for Assigned Names and Numbers, or ICANN, renews automatically as long as it meets a few simple requirements. It pays a fee to ICANN, operates critical infrastructure for the internet, and provides uninterrupted domain name system (DNS) services. In return, anyone who wants to register or renew a .com or .net domain name has to pay Verisign to do so. And the price can increase almost every year.
While there's a growing number of competing top-level domains, .com and .net remain the most important for any business. Still, Verisign saw sinking registration rates due to lower renewal rates and fewer new registrations over the last few years. But that trend has reversed so far in 2025, and it's seeing strong renewal rates leading to growth in its domain name base once again.
That strength has stemmed from a strategic shift in its marketing programs, which incentivizes registrars to focus on quality customer acquisition instead of simply extracting the highest revenue per user. That creates better long-term results for both businesses. As a result, Verisign counted 10.4 million new domain registrations last quarter versus 9.2 million in the same period last year.
Combined with the annual price hikes in its domains, revenue climbed 6% year over year despite a slight decline in total domain name registrations. With the trends working in its favor, that revenue should accelerate over the next few quarters. And with relatively stable operating expenses, margins should expand as well.
The operating strength at Verisign hasn't gone unnoticed by the market. Even after a pullback in price following the news Berkshire was selling, the stock is still up 28% year to date. That puts its forward P/E ratio around 30, which is quite the premium to what Buffett was paying at the start of the year when it traded for less than 24 times earnings expectations. With the improved outlook for the business, investors may consider picking up the shares somewhere in between those valuations, but they'll need to wait for a bigger pullback to get a great deal on the stock.
