Fair Isaac Corporation (FICO) Fell Due to Regulatory Pressure

Baron Funds, an investment management company, released its “Baron FinTech Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund fell 4.29% (Institutional Shares) compared to a 1.90% decline for the FactSet Global FinTech Index (Benchmark). Since its inception, the fund has appreciated at an annualized rate of 11.10%, compared to a 4.00% return for the Benchmark. The market strength in the quarter was primarily driven by the resumption of Federal Reserve (the Fed) rate cuts and AI optimism. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Baron FinTech Fund 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 7.47%, and its shares lost 23.37% of their value over the last 52 weeks.  On November 14, 2025, Fair Isaac Corporation (NYSE:FICO) stock closed at $1,741.37 per share, with a market capitalization of $41.286 billion.

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

“Within Information Services, data and analytics companies Fair Isaac Corporation (NYSE:FICO) and Verisk Analytics, Inc. hampered performance for a second consecutive quarter. Despite reporting strong quarterly results and raising full-year guidance, FICO’s shares underperformed due to regulatory pressure from the Federal Housing Finance Agency, with director Bill Pulte advocating for greater credit score competition in the mortgage market. We expect FICO to retain its dominant market position and continue growing earnings per share at a rapid rate from price increases, a rebound in mortgage originations, and continued growth in non-mortgage consumer lending.”

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

Fair Isaac Corporation (NYSE:FICO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 74 hedge fund portfolios held Fair Isaac Corporation (NYSE:FICO) at the end of the second quarter, which was 68 in the previous quarter. 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 a bullish thesis on the company. In addition, please check out our hedge fund investor letters Q3 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.