Why This High-Yield Warren Buffett Stock Is Falling This Week

Since last Friday, shares of the digital audio company Sirius XM Holdings (NASDAQ: SIRI) are now trading 13.5% lower as of 1:52 p.m. ET Thursday. Sirius, a stock Warren Buffett's Berkshire Hathaway has been piling into, fell after the company's chief financial officer (CFO) spoke about concerns for the sector.

Tariffs could be problematic for ad spending

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At an industry event Tuesday, CFO Tom Barry made several comments about how tariffs, inflation, and other uncertainties have started to affect ad spending, which is a big driver of revenue at the company:

I think it's adversely impacting the ad space. If you look at January and February of this quarter, we were stable. We were right in line where we thought we'd be. And in the last couple of weeks or week and a half, we're starting to see a drop-off.

Barry added that the company saw some softness in ad spending from the retail and consumer packaged goods sectors over the past few weeks, and in other categories in recent days, which is starting to make him concerned about broader ad trends.

Recent data has pointed to weakness in the economy and maybe even signs of a recession or stagflation. Ad spending usually gets hit pretty hard in a recession, so any company in this space is going to feel some impact.

Controlling what you can control

Sirius' stock has struggled immensely, with shares down over 47% over the past year. Investors are worried about the demand for satellite radio in an increasingly competitive industry. Still, the company has developed a transformation plan that involves bringing on big podcast brands and streamlining their advertising and distribution strategy.

Buffett and his team seem to be on board, since Sirius has been one of a handful of stocks that Berkshire purchased in 2024. But the situation will likely take time to play out, and it's going to be a show-me story. Patient investors can buy the stock and enjoy a nearly 5% dividend yield while they wait for the transformation to come to fruition.

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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.