VeriSign, Inc. (VRSN): A Bull Case Theory

We came across a bullish thesis on VeriSign, Inc. (VRSN) on Incremental Returns’ Substack. In this article, we will summarize the bulls’ thesis on VRSN. VeriSign, Inc. (VRSN)'s share was trading at $275.56 as of 2^nd June. VRSN’s trailing and forward P/E were 33.69 and 31.25 respectively according to Yahoo Finance.

Verisign (VRSN) exemplifies a business fortified by regulatory structure, technical prowess, and systemic inertia, forming one of the most defensible competitive moats in modern infrastructure. At the heart of its advantage is an exclusive contractual relationship with ICANN and the U.S. Department of Commerce, which effectively ensures its ongoing control over the .com and .net domain registries.

The inclusion of a presumptive right of renewal clause in these contracts gives Verisign a near-perpetual license, assuming compliance, creating a regulatory fortress that would be nearly impossible for any competitor to penetrate. Complementing this legal insulation is Verisign’s unmatched technical track record, having provided 26 consecutive years of uninterrupted DNS service. This operational excellence not only underpins its credibility but also raises the bar prohibitively high for any aspiring challengers who would need to match Verisign’s reliability and security to even be considered viable alternatives.

Further reinforcing its position are the immense systemic switching costs. The risks associated with transitioning the core registry functions for .com and .net domains create powerful disincentives for any change, as even minor disruptions could jeopardize global internet stability. While Verisign lacks consumer-facing brand recognition, the ubiquity and credibility of .com and .net domains—holding a combined 46% market share among top-level domains—cement its position in the digital landscape.

This brand association with legitimacy and trust creates a self-perpetuating advantage. In totality, Verisign’s combination of regulatory entrenchment, technical supremacy, switching frictions, and domain dominance forms a long-lasting competitive shield, suggesting its strategic position is likely secure for decades to come.

VeriSign, Inc. (VRSN) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held VRSN at the end of the first quarter which was 41 in the previous quarter. While we acknowledge the potential of VRSN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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