Conestoga Smid Cap Composite Decided to Sell Fair Isaac Corp. (FICO) in Q2

Conestoga Capital Advisors, an asset management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter began with a historically poor start, but gained momentum later as tariff fears subsided and market volatility dropped precipitously. Conestoga Smid Cap Composite underperformed the Russell 2500 Growth Index in the quarter and returned 5.00% net-of-fees vs 11.31% for the index. Sector allocation effects were positive, while sector allocation effects were negative. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its second quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as Fair Isaac Corporation (NYSE:FICO). Fair Isaac Corporation (NYSE:FICO) develops analytic, software, and digital decision-making technologies and services. The one-month return of Fair Isaac Corporation (NYSE:FICO) was -16.16%, and its shares lost 3.54% of their value over the last 52 weeks.  On July 25, 2025, Fair Isaac Corporation (NYSE:FICO) stock closed at $1,532.52 per share, with a market capitalization of $37.304 billion.

Conestoga Capital Advisors stated the following regarding Fair Isaac Corporation (NYSE:FICO) in its second quarter 2025 investor letter:

“Fair Isaac Corporation (NYSE:FICO): One of the leading providers of credit scoring and other related services to a wide range of industries around the world, FICO has been held in the SMid Cap Growth strategy since 2018. Driven by its expanded revenue and earnings growth since that time, FICO’s market capitalization rose above $40 billion during 2Q, and we elected to remove the stock from client portfolios.”

Fair Isaac Corporation (FICO): Revolutionizing Decision-Making with 12 New AI Patents

A hands-on approach: technicians working on data management products in an open lab space.

Fair Isaac Corporation (NYSE:FICO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 68 hedge fund portfolios held Fair Isaac Corporation (NYSE:FICO) at the end of the first quarter, which was 60 in the previous quarter. In the fiscal second quarter of 2025, Fair Isaac Corporation (NYSE:FICO) reported revenue of $499 million, up 15% year-over-year. While we acknowledge the risk and potential of Fair Isaac Corporation (NYSE:FICO) 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 Fair Isaac Corporation (NYSE:FICO) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Fair Isaac Corporation (NYSE:FICO) and shared the list of best extremely profitable stocks to buy. 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.