Intercontinental Exchange (ICE) Fell Due to Investors' Bias Toward AI Stocks

Sands Capital, an investment management company, released its “Sands Capital Select Growth Strategy” Q3 2025 investor letter. A copy of the letter can be downloaded here. U.S. large-cap growth equities continued to recover from a sharp sell-off in early April. Strong corporate earnings, investor enthusiasm around artificial intelligence (AI), and growing expectations for Federal Reserve policy easing drove the robust gains. The portfolio returned 6.3% (net) in the quarter, compared to the benchmark's 10.5% gain. You can check the fund’s top 5 holdings to know more about its best picks for 2025.

In its third-quarter 2025 investor letter, Sands Capital Select Growth Strategy highlighted stocks such as Intercontinental Exchange, Inc. (NYSE:ICE). Intercontinental Exchange, Inc. (NYSE:ICE) is a financial services company that offers market infrastructure, data services, and technology solutions for financial institutions, corporations, and government entities. The one-month return of Intercontinental Exchange, Inc. (NYSE:ICE) was 3.76%, and its shares lost 3.04% of their value over the last 52 weeks. On November 26, 2025, Intercontinental Exchange, Inc. (NYSE:ICE) stock closed at $156.29 per share, with a market capitalization of $89.464 billion.

Sands Capital Select Growth Strategy stated the following regarding Intercontinental Exchange, Inc. (NYSE:ICE) in its third quarter 2025 investor letter:

"Intercontinental Exchange, Inc. (NYSE:ICE) is one of the world’s largest derivatives exchanges and clearinghouse. The stock lagged the broader market during a period when investors favored businesses with direct exposure to AI. In our view, underlying results were strong, with sales up 10 percent and adjusted earnings per share up 19 percent year over year, both ahead of consensus expectations. Looking ahead, we expect the energy complex to normalize against tougher comparisons following two strong years. Meanwhile, ICE’s Mortgage Technology division (IMT) is showing accelerating refinancing activity off a low base, which is driving meaningful improvements in profitability. In our view, these improvements to IMT profitability are more significant and meaningful to the long-term growth case for ICE versus year-to-year volatility in the Exchange segment."

Intercontinental Exchange, Inc. (NYSE:ICE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 84 hedge fund portfolios held Intercontinental Exchange, Inc. (NYSE:ICE) at the end of the second quarter, compared to 94 in the previous quarter. While we acknowledge the potential of Intercontinental Exchange, Inc. (NYSE:ICE) 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 Intercontinental Exchange, Inc. (NYSE:ICE) and shared the list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.