Neil Patel, The Motley Fool

Tue, Jun 24, 2025, 2:59 AM4 min read

• By benefiting from the shift away from cash, this fintech giant continues to post durable growth.

• This business possesses an incredibly powerful network effect that makes its competitive position almost impossible to disrupt.

• Investors must question whether the stock can outperform the market.

• 10 stocks we like better than Visa ›

Berkshire Hathaway currently has dozens of different holdings in its vast $281 billion public equities portfolio. Some positions are huge, like Apple and American Express. These get a lot of the attention.

But there are also much smaller holdings, like this one financial stock that has generated a total return of 428% in the past decade (as of June 20). It only represents 1% of the conglomerate's portfolio. Are the shares poised to continue heading higher?

Despite having a $657 billion market cap, Visa (NYSE: V) is just a tiny position in Berkshire's portfolio. Investors shouldn't let the small size take away from how outstanding of a business this is. One important reason why is because of a secular trend that has driven ongoing growth.

Visa benefits from the so-called war on cash, as digital forms of payment are becoming more widely used. As credit cards and debit cards, for instance, find greater adoption at checkout, Visa gains because it can handle more payment volume over time. In the latest fiscal quarter (the second quarter of fiscal 2025 ended March 31), the business processed a whopping $3.9 trillion in total payment volume. This drove 9% year-over-year revenue growth.

In the U.S., 83% of consumers used cash when buying something, more than any other payment method, according to data from the Federal Reserve Bank of Atlanta. This demonstrates how much opportunity Visa still has to steal share away from cash usage, even in the largest economy and perhaps the most developed financial system.

It seems these days investors should be worried more about how the businesses they own or that they are interested in owning can potentially be disrupted. Technology, the internet, and the advent of artificial intelligence can have an impact on different industries. From an investment perspective, it's important to understand how companies are positioned to defend against certain threats.

In Visa's case, it has a wide economic moat that protects it. The most critical factor is the presence of a powerful network effect. The huge number of merchant acceptance locations on one side, and billions of active cards on the other, make the system incredibly valuable to all stakeholders. Visa improves for its users the larger it gets, too.