Does VeriSign (VRSN) Have an Attractive Business Model?

Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” investor letter for the first quarter of 2025. A copy of the letter can be downloaded here. The first quarter of 2025 was mixed due to a flurry of activity from the new presidential administration. However, the strategy outperformed the Russell Midcap Index in Q1, returning -1.26% (net) vs -3.40% for the index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2025.

In its first-quarter 2025 investor letter, Diamond Hill Mid Cap Strategy highlighted stocks such as VeriSign, Inc. (NASDAQ:VRSN). VeriSign, Inc. (NASDAQ:VRSN) offers internet infrastructure and domain name registry services. The one-month return of VeriSign, Inc. (NASDAQ:VRSN) was -3.76%, and its shares gained 52.24% of their value over the last 52 weeks. On June 4, 2025, VeriSign, Inc. (NASDAQ:VRSN) stock closed at $274.49 per share with a market capitalization of $25.775 billion.

Diamond Hill Mid Cap Strategy stated the following regarding VeriSign, Inc. (NASDAQ:VRSN) in its Q1 2025 investor letter:

“On an individual holdings basis, top contributors to return in Q1 included VeriSign, Inc. (NASDAQ:VRSN) and Huntington Ingalls. VeriSign, which provides internet infrastructure and domain name registry services, successfully renewed its .com agreement with the US Department of Commerce in late 2024. It also demonstrated stability in both its .com and .net domain bases. We believe the company is favorably positioned with an attractive business model and management team, which has effectively opportunistically allocated capital.”

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A close-up view of an engineer deploying a new piece of internet infrastructure.

VeriSign, Inc. (NASDAQ:VRSN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held VeriSign, Inc. (NASDAQ:VRSN) at the end of the first quarter, which was 41 in the previous quarter. VeriSign, Inc. (NASDAQ:VRSN) reported revenue of $402 million in the first quarter of 2025, up 4.7% from the same quarter a year ago. While we acknowledge the potential of VeriSign, Inc. (NASDAQ:VRSN) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered VeriSign, Inc. (NASDAQ:VRSN) and shared the list of best stocks to buy according to Jim Simons’ Renaissance Technologies. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.