Visa (V) Benefited from Its Relative Resilience as a Payments Stock

Parnassus Investments, an investment management company, released the “Parnassus Growth Equity Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the Fund (Investor Shares) returned -8.59% (net of fees), outperforming the Russell 1000 Growth Index’s -9.97% decline. In the first quarter, post-election optimism, driven by reduced regulation and a business-friendly environment, drifted away to concerns over fiscal and tariff uncertainties, which increased volatility and raised fears of a recession. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Parnassus Growth Equity Fund highlighted stocks such as Visa Inc. (NYSE:V). Headquartered in San Francisco, California, Visa Inc. (NYSE:V) is a payment technology company. The one-month return of Visa Inc. (NYSE:V) was -5.25%, and its shares gained 31.84% of their value over the last 52 weeks. On June 26, 2025, Visa Inc. (NYSE:V) closed at $346.03 per share, with a market capitalization of $675.97 billion.

Parnassus Growth Equity Fund stated the following regarding Visa Inc. (NYSE:V) in its Q1 2025 investor letter:

"Visa Inc. (NYSE:V) reported quarterly earnings that topped consensus expectations and issued optimistic guidance at its latest Investor Day. In a market environment where investors turned to more defensive options, Visa benefited from being relatively resilient for a payments stock, given its domestic debit card exposure, which is primarily grocery related."

Visa Inc. (NYSE:V) is in 6th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 165 hedge fund portfolios held Visa Inc. (NYSE:V) at the end of the first quarter, which was 181 in the previous quarter. In Q1 2025, Visa Inc. (NYSE:V) reported $9.5 billion in net revenue, up 10% year-over-year. While we acknowledge the potential of Visa Inc. (NYSE:V) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Visa Inc. (NYSE:V) and shared the list of stocks Jim Cramer recently discussed. Macquarie Large Cap Growth Fund views Visa Inc. (NYSE:V) as one of the most profitable business models available for investment. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of V 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.

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