What Makes Fiserv (FI) an Attractive Investment Bet?

Vltava Fund, an investment management company, recently released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The letter is addressed "Value Traps and Growth Traps," based on the firm’s three new investments from the last quarter. While value and growth stocks seem like clear categories, the author believes they are interconnected rather than opposites. A value trap occurs when investors buy seemingly cheap stocks with underlying structural issues, resulting in stagnation or a decline in share price. However, a growth trap arises when investors purchase shares of rapidly growing companies with high valuations that unexpectedly slow down, leading to reduced projections and declining valuation multiples. Basically, both value and growth are two sides of a coin, and the investor should combine a reasonable price with a realistic outlook. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Vltava Fund 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 -5.55%, and its shares lost 31.20% of their value over the last 52 weeks. On October 3, 2025, Fiserv, Inc. (NYSE:FI) stock closed at $127.56 per share, with a market capitalization of $69.341 billion.

Vltava Fund stated the following regarding Fiserv, Inc. (NYSE:FI) in its third quarter 2025 investor letter:

"Fiserv, Inc. (NYSE:FI) is an American company. It is one of the world’s largest providers of financial technology infrastructure and is a constituent of the S&P 500 index. The company operates in more than 100 countries, and its services are used by banks, credit unions, fintech companies, merchants, and government institutions. The main pillar of its business is the processing of payment transactions and card operations, complemented by a wide range of services for merchants, including payment acceptance, point-of-sale terminals, and e-commerce integrations. Significant growth came with the acquisition of First Data in 2019, which strengthened the merchant acceptance segment and gave rise to the Clover platform, now one of the fastest-growing POS platforms for small and medium-sized businesses. In addition, Fiserv provides banks with comprehensive technology solutions for digital transformation, from core banking systems and online banking to tools for risk management and compliance. Another area is specialized payment services, such as ACH (automated clearing house) payments, real-time transfers, and card issuing services.

Fiserv’s business model is attractive because of how it combines scale, diversification, and high barriers to customer turnover. The company serves thousands of financial institutions and millions of merchants with long-term contracts. This makes switching to another provider difficult and ensures a stable revenue base. Annual revenues exceed USD 20 billion, and the fastest-growing segment is merchant acceptance, where the fee model benefits from the ever-increasing volume of digital payments. Thanks to the strong scalability of its infrastructure and robust free cash flow generation, Fiserv has sufficient resources for both acquisitions and share buybacks...' (Click here to read the full text)

Fiserv, Inc. (NYSE:FI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 94 hedge fund portfolios held Fiserv, Inc. (NYSE:FI) at the end of the second quarter, up from 72 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 buy-the-dip stocks to buy according to 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.