Competition from Stable Coins Impacted Visa’s (V) Relative Returns

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 Visa Inc. (NYSE:V). Headquartered in San Francisco, California, Visa Inc. (NYSE:V) is a payment technology company. Visa Inc. (NYSE:V) shares returned -0.70% over the past month and appreciated by 28.85% over the last 12 months. On August 25, 2025, Visa Inc. (NYSE:V) stock closed at $348.82 per share, with a market capitalization of $677.039 billion.

Baron FinTech Fund stated the following regarding Visa Inc. (NYSE:V) in its second quarter 2025 investor letter:

“Global payment networks Visa Inc. (NYSE:V) and Mastercard Incorporated were up slightly but underperformed on a relative basis after performing well earlier in the year. Underperformance reflected concerns about the competitive threat from stablecoins given the blowout returns of stablecoin issuer Circle Internet Group following its IPO in June. We believe such concerns are overdone and remain confident in the networks’ growth prospects and competitive advantages.”

Is Visa Inc. (V) the Best Blue Chip Stock to Buy for 2025?

A close-up of a credit card being swiped on a payment terminal, reflecting the company’s payments technology.

Visa Inc. (NYSE:V) is in 6th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 167 hedge fund portfolios held Visa Inc. (NYSE:V) at the end of the second quarter, which was 165 in the previous quarter. In the fiscal third quarter of 2025, Visa Inc. (NYSE:V) reported $10.2 billion in net revenue, up 14% year-over-year.  While we acknowledge the risk and potential of Visa Inc. (NYSE:V) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Visa Inc. (NYSE:V) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Visa Inc. (NYSE:V) and shared the list of top stocks to buy and hold forever. 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.