In its fourth-quarter investor letter, Hotchkis & Wiley provided insights into the performance of the Hotchkis & Wiley Large Cap Disciplined Value Fund, revealing that Fiserv, Inc. (NASDAQ:FISV) emerged as a significant detractor during this period. The S&P 500 index returned 2.7% for the quarter, contributing to an impressive annual growth rate of 17.9%. However, investor sentiment remains cautious due to high valuations and uneven performance concentrated among a select few stocks.
Fiscal Challenges for Fiserv
Fiserv, a leading financial technology company known for providing payment and fintech services, experienced notable challenges in Q4 2025. The company’s stock recorded a one-month return of -3.29% and suffered a staggering 70.64% loss in value over the past year, closing at $63.43 per share on January 29, 2026. Its current market capitalization stands at $34.48 billion.
Hotchkis & Wiley highlighted specific concerns regarding Fiserv’s future in their investor letter. They pointed out that the company faced a significant adjustment in its fiscal outlook, particularly after a disappointing performance in the Financial Solutions segment. This led to a substantial downgrade in guidance for the fiscal year 2025, raising questions about the company’s growth trajectory.
In their analysis, Hotchkis & Wiley noted the company’s scale and diversification, emphasizing that Fiserv has the potential to deliver double-digit earnings growth. However, they acknowledged that the new CEO has indicated 2026 will be a transitional year, resetting the company’s long-term growth expectations to a lower baseline.
Market Position and Hedge Fund Interest
Despite the challenges, Fiserv remains a key player in the fintech sector. It was noted that the fund outperformed the Russell 1000 Value Index in both Q4 and over the entire calendar year, partly due to effective stock selection strategies. However, Fiserv’s stock is not currently featured among the 30 Most Popular Stocks Among Hedge Funds. As of the end of Q3, 83 hedge fund portfolios included Fiserv, a decrease from 94 the previous quarter.
Hotchkis & Wiley conveyed their mixed feelings regarding Fiserv’s potential, suggesting that while the company has inherent risks, other emerging AI stocks may present more lucrative opportunities for investors in the near term. The firm is particularly optimistic about stocks that could deliver significant returns, stating that some have the potential for 10,000% upside.
For those interested in understanding more about Fiserv, further analysis is available in related articles, including perspectives from Vulcan Value Partners on the company’s future. Additionally, investors can explore more insights through the hedge fund investor letters for Q4 2025, which provide a broader view of market trends and strategies employed by leading investment firms.
As the fintech landscape evolves, Fiserv will need to address its operational challenges while leveraging its strengths to regain investor confidence and enhance its market positioning.
