Fair Isaac Corporation (FICO) Declined in Q2 Due to Regulatory Pressures

Baron Funds, an investment management company, released its “Baron FinTech Fund” second quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned 9.26% (Institutional Shares) compared to a 13.82% return for the FactSet Global FinTech Index (Benchmark). Since its inception, the fund has appreciated at an annualized rate of 12.53%, compared to a 4.55% return for the Benchmark. The fund managed gains in a period of heightened volatility. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Baron FinTech Fund highlighted stocks such as Fair Isaac Corporation (NYSE:FICO). Fair Isaac Corporation (NYSE:FICO) develops analytic, software, and digital decision-making technologies and services. The one-month return of Fair Isaac Corporation (NYSE:FICO) was -5.39%, and its shares lost 16.97% of their value over the last 52 weeks.  On August 25, 2025, Fair Isaac Corporation (NYSE:FICO) stock closed at $1,423.87 per share, with a market capitalization of $34.178 billion.

Baron FinTech Fund stated the following regarding Fair Isaac Corporation (NYSE:FICO) in its second quarter 2025 investor letter:

"Weakness in Information Services was widespread, led by poor performance from data and analytics companies Fair Isaac Corporation (NYSE:FICO) and Verisk Analytics, Inc. FICO’s shares underperformed due to regulatory pressure from the Federal Housing Finance Agency, with new director Bill Pulte criticizing the price of FICO scores in the conforming mortgage market. Rising interest rates and the potential ramifications for lending activity also pressured the stock."

Fair Isaac Corporation (NYSE:FICO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 74 hedge fund portfolios held Fair Isaac Corporation (NYSE:FICO) at the end of the second quarter, which was 68 in the previous quarter. In the fiscal third quarter of 2025, Fair Isaac Corporation (NYSE:FICO) reported revenues of $536 million, up 20% over last year. While we acknowledge the potential of Fair Isaac Corporation (NYSE:FICO) 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 Fair Isaac Corporation (NYSE:FICO) and shared the list of best S&P 500 stocks to buy according to Wall Street analysts. 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.