Fiserv Shares Tumble as Hotchkis & Wiley Fund Flags Payment Giant as a Top Detractor
Amid a robust year for U.S. equities, the Hotchkis & Wiley Large Cap Disciplined Value Fund has singled out a notable laggard in its portfolio. In its recently released fourth-quarter 2025 investor letter, the investment management firm pointed to financial services titan Fiserv, Inc. (NASDAQ: FISV) as one of its leading detractors for the period.
The broader market context was one of strength. The S&P 500 climbed 2.7% in the fourth quarter, capping a year with a total return of 17.9%. This performance extends a remarkable bull run that has seen the index multiply tenfold since the depths of the 2008 financial crisis. However, Hotchkis & Wiley noted that high aggregate valuations and concentrated gains in a handful of mega-cap stocks have prompted investor caution. Excluding the so-called "Magnificent Seven," the index's forward price-to-earnings ratio appears more in line with historical norms.
Against this backdrop, Fiserv's struggles stood out. The provider of payment processing and financial technology solutions saw its shares decline 3.29% in the one-month period ending with the quarter. More strikingly, the stock has plummeted approximately 70.64% over the trailing 52 weeks, closing at $63.43 on January 29, 2026. This erosion has reduced the company's market capitalization to around $34.5 billion.
In its commentary, Hotchkis & Wiley acknowledged Fiserv's underlying potential but suggested the market sees greater opportunity—and perhaps less risk—elsewhere. "While we acknowledge the potential of Fiserv as an investment," the letter stated, "we believe certain AI stocks offer greater upside potential and carry less downside risk." The fund's database showed hedge fund ownership of Fiserv dipped from 94 portfolios in Q2 to 83 by the end of Q3 2025.
The firm's Value Fund itself outperformed its benchmark, the Russell 1000 Value Index, in both the quarter and the full calendar year, attributing success to positive stock selection.
Analyst & Investor Commentary:
"This is a classic case of a solid company caught in the wrong narrative," said Michael R. Chen, a fintech analyst at Sterling Capital Insights. "Fiserv's core payment processing business remains a cash cow, but investors are fleeing anything perceived as 'old tech' to chase AI euphoria. The sell-off seems overdone relative to fundamentals."
"The 70% drop isn't just a correction; it's a verdict," argued Sarah J. Vance, portfolio manager at the outspoken Vance Capital Group. "The market is telling Fiserv its model is under existential threat from nimbler fintechs and embedded finance. Management has failed to articulate a compelling AI or cloud strategy, and now they're paying the price. This is more than a cyclical dip."
"As a long-term shareholder, I'm viewing this as a potential entry point," commented David R. Lee, a private investor and former bank CFO. "The valuation is becoming hard to ignore for a company with its market position and cash flow. The transition pain is real, but the financial infrastructure backbone they provide isn't going away overnight."
Disclosure: This analysis is based on publicly available information from Hotchkis & Wiley and market data. It is for informational purposes only and does not constitute investment advice.