Tariff-Resilient Tech Stocks: CyberArk & Verisign’s Durable Edge

Key Points

• With new tariff news circling by the day, business costs and uncertainty are rising.
• Two tech stocks have strong characteristics that give them resistance to tariff woes and uncertainty. 
• Warren Buffett's Berkshire Hathaway is the largest investor in one of these names, and vaunted tech analyst Dan Ives has promoted the other.

With tariffs dominating the conversations in financial markets recently, looking for stocks that can withstand their effects can be highly valuable. This is true even as President Trump appears to be making a 180 on his tariff talk. The Wall Street Journal has communicated with a senior White House official.

This person believes that Trump could reduce tariffs on China to 50% to 65% from the current 145%. This was music to many investors' ears. It was one of the key factors helping the S&P 500 Index rise by 1.7% on April 23.

However, calling the next move in Trump’s tariff fight has been nearly impossible. This results in uncertainty, which is just as pernicious as the tariffs themselves. 

Uncertainty manifests not only in stock market volatility but also in the conversations businesses have every day. If they don’t know what the government will do next, planning for the future becomes very difficult.

That leads us to two stocks that may be particularly suited to withstand tariffs and the uncertainty these policies create.

CyberArk: Cybersecurity Player That Protects Mission-Critical Data

One strong player amid tariff uncertainty is the cybersecurity company CyberArk Software NASDAQ: CYBR. Generally, cybersecurity is likely to be one of the last places businesses look to cut spending, even during times of economic uncertainty.

Companies must secure their data and their customers' data or face a massive loss of trust. Data breaches can turn a business upside down, making top-notch cybersecurity essential.

CyberArk has key features that may make it more resilient to tariffs and business uncertainty than other cybersecurity firms.

First, CyberArk secures companies' data primarily through software solutions rather than hardware. Because tariffs only impact physical goods, CyberArk has less direct tariff risk, which sets it apart from companies that rely heavily on hardware solutions.

CyberArk also specializes in a specific area of cybersecurity known as Privileged Access Management (PAM). PAM explicitly protects users in an organization with access to “privileged” information.

These users have access to vast and highly sensitive data. A data breach that affects a privileged account could allow a bad actor to create a catastrophic effect on a business. CyberArk’s specialization in this space helps make it particularly resistant to business uncertainty compared to less critical cybersecurity solutions.

Dan Ives, the Global Head of Technology Research at Wedbush Securities, recently noted that CyberArk is a stock that can hold strong despite tariffs. He said that the stock could “likely outperform other subsets of tech” amid tariff concerns.

Verisign: Monopolistic Tech Firm Backed by Buffett

Next up is Verisign NASDAQ: VRSN. Most probably haven’t heard of this tech company, but it plays a critical role in the proliferation of the internet. The company dominates the generic top-level domain (gTLD) market. gTLDs refer to the ending characters of a website URL, like “.com” or ".net."

Verisign has exclusive agreements with the Internet Corporation for Assigned Names and Numbers (ICANN) to operate the “.com” and “.net” gTLDs.

Essentially, if a person or business wants to operate a website with a “.com” or “.net” suffix, they must pay Verisign for the right to do so, no questions asked. John Levine from CircleID notes that over twice as many sites use “.com” as all other gTLDs combined.

Given this, and most people's familiarity with the “.com” gTLD, Verisign has an essential monopoly on the overall market.

Verisign charges relatively little, just $10.26 yearly to register a “.com” domain. Overall, these dynamics put Verisign in a strong position when considering tariffs. Since the company sells a service, not physical goods, tariffs don’t affect it directly. Also, companies are highly unlikely to stop paying for their domain due to tariffs. 

The low-cost Verisign charges have little to no impact on companies' expenses. A move to stop paying Verisign would only confuse customers, as a company would have to change its gTLD. This would impact revenues and customer service.

The resilience of Verisign's business is shown in the fact that its revenues have increased every single year since 2008. Verisign is also extremely profitable, with a net income margin of around 48%. Notably, Warren Buffett's Berkshire Hathaway NYSE: BRK.A is the largest shareholder in Verisign. The firm owns around 14% of the company’s outstanding shares. Backing from this renowned investor is another reason to have confidence in Verisign.