Fair Isaac Corporation (FICO) Gained from Strong Results and Improved Guidance

Baron Fund, an investment management company, released its Q4 2025 letter for “Baron Asset Fund”. A copy of the letter can be downloaded here. Equities experienced a strong fourth quarter, capping off a volatile year. However, the Russell Midcap Growth Index (the Index) ended the quarter down 3.70%. In this environment, the Baron Asset Fund returned 7.89% (Institutional Shares), surpassing the Index by 11.59 percentage points. Favorable stock selection led to the outperformance of the Fund in the quarter. As of December 31, 2025, the Fund held a total of 53 positions, and the 10 largest holdings represented 52.8% of net assets, and the 20 largest holdings represented 73.3% of net assets. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Baron Asset Fund highlighted stocks such as Fair Isaac Corporation (NYSE:FICO). Fair Isaac Corporation (NYSE:FICO) is a technology company that develops analytic, software, and digital decision-making technologies and services. The one-month return of Fair Isaac Corporation (NYSE:FICO) was -15.43%, and its shares lost 23.62% of their value over the last 52 weeks. On February 9, 2026, Fair Isaac Corporation (NYSE:FICO) stock closed at $1,372.76 per share, with a market capitalization of $32.56 billion.

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

"Investments in IT, Health Care, and Financials also boosted relative results. Strength in IT came from high-technology interconnect, sensor, and antenna solutions provider Amphenol Corporation and consumer data and analytics company Fair Isaac Corporation. Fair Isaac Corporation (NYSE:FICO) shares increased on strong fourth quarter earnings and solid preliminary fiscal year 2026 guidance. The company also launched its new Direct Licensing Program for mortgage lending, which gives the company more flexibility to monetize its intellectual property going forward and was well received by Federal Housing Finance Agency director Bill Pulte. While some areas of near-term uncertainty persist, we believe that Fair Isaac will be a strong earnings compounder, which should drive solid returns for the stock over a multi-year period."

Fair Isaac Corporation (NYSE:FICO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 72 hedge fund portfolios held Fair Isaac Corporation (NYSE:FICO) at the end of the third quarter, compared to 74 in the previous quarter. Fair Isaac Corporation (NYSE:FICO) announced first-quarter of fiscal 2026 revenue of $512 million, reflecting a 16% year-over-year growth. 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 Brown Advisory Large-Cap Growth Strategy's views on the company last quarter. In addition, please check out our hedge fund investor letters Q4 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.