Fiserv (FI) Slid Due to Decelerated Growth in its Clover Payment Services Product Line

Kovitz Investment Group Partners, LLC, an investment management company, released its “Kovitz Core Equity Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the strategy returned 7.9% compared to the S&P 500’s 10.9% return. Equity markets saw notable volatility after the President's "Liberation Day" tariff announcement on April 2nd. The S&P 500 dropped 11% initially but later rallied 25% in the quarter after the tariffs were postponed by 90 days on April 9th. Additionally, you can review the fund’s top 5 holdings to see its best picks for 2025.

In its second-quarter 2025 investor letter, Kovitz Core Equity Strategy highlighted stocks such as Fiserv, Inc. (NYSE:FI). Fiserv, Inc. (NYSE:FI) is a payment and fintech services provider. The one-month return of Fiserv, Inc. (NYSE:FI) was -20.87%, and its shares lost 16.15% of their value over the last 52 weeks. On August 5, 2025, Fiserv, Inc. (NYSE:FI) stock closed at $134.28 per share with a market capitalization of $72.994 billion.

Kovitz Core Equity Strategy stated the following regarding Fiserv, Inc. (NYSE:FI) in its second quarter 2025 investor letter:

"Fiserv, Inc. (NYSE:FI) stock declined 22% in Q2 after the company reported that volume growth decelerated in the company’s Clover payment services product line. Clover is a modern payments point of-sale hardware and software product that has been growing payment volumes in the mid teens and revenues in the mid-to-high twenty percent range. For Q1 2025, Fiserv said that, due to some seasonal factors and some transitory year-over-year comparison noise, Clover’s volume growth was just +8%. The market reaction for missing higher expectations was severely negative, perhaps because Clover is viewed as a key growth driver for Fiserv, or perhaps because new CEO Mike Lyons had just transitioned into the role, replacing highly regarded outgoing CEO, Frank Bisignano, who began his new position leading the U.S. Social Security Administration. Uncertainty can accompany management changes, although we feel good about Fiserv’s deep and experienced team. Earnings power expectations for 2025 for Fiserv have not changed. For Clover, a number of positive product enhancements, new geographic market launches, growing distribution partnerships and direct sales support, and the overall strategic roadmap keep us positive for the long-term. Additionally, revenues are accelerating in Fiserv’s Financial Solutions Segment, which constitutes half of revenue and more than half of profits. Fiserv stock trades at a very-reasonable mid-teens earnings multiple, which looks cheap relative to its growth prospects and to the broader stock market. We added to the stock on the price decline and are optimistic about its risk-return profile."

Fiserv, Inc. (NYSE:FI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held Fiserv, Inc. (NYSE:FI) at the end of the first quarter, which was 80 in the previous quarter. In the second quarter of 2025, Fiserv, Inc.'s (NYSE:FI) adjusted revenue grew 8% to $5.2 billion. While we acknowledge the potential of Fiserv, Inc. (NYSE:FI) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Fiserv, Inc. (NYSE:FI) and shared the list of best information technology services stocks to invest in. Madison Large Cap Fund cited similar reasons for the decline of Fiserv, Inc. (NYSE:FI) in Q2. In addition, please check out our hedge fund investor letters Q2 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.