Giverny Capital Exits Fiserv Stake, Citing AI Shift and Underperformance
In its recently released fourth-quarter 2025 investor letter, Giverny Capital Asset Management disclosed it had exited its position in payments processor Fiserv, Inc. (FISV). The move punctuated a challenging year for the firm, which saw its portfolio return a mere 0.01% in Q4 against the S&P 500's 2.66% gain.
The letter outlined a market environment dominated by a handful of large technology companies, where a portfolio "underweight in large tech and overweight in smaller niche leaders" became a headwind. Giverny's managers noted that while its holdings showed strong earnings growth and capital returns, investor attention—and capital—has been overwhelmingly captured by the AI investment theme, leaving the tangible benefits of such bets still unclear.
Fiserv, a cornerstone of the financial technology sector, has been caught in this shift. Its shares have plummeted approximately 70% over the past 52 weeks, closing at $63.43 on January 29, 2026. Once held by 94 hedge funds at the end of Q2 2025, that number fell to 83 by the end of Q3, according to Giverny's data.
"While we acknowledge Fiserv's underlying business strengths," the letter stated, "we reallocated capital toward what we believe are AI-exposed equities with superior risk-reward profiles." The firm suggested certain AI stocks present greater upside with less downside risk, a calculus that ultimately led to the Fiserv divestment.
Analyst & Investor Commentary:
"Giverny's move is a pragmatic, if painful, admission of current market realities," said Michael Thorne, a portfolio manager at Sterling Advisory. "When a core holding deteriorates that dramatically, and the thematic wind is blowing squarely against you, holding on for a 'fundamental' recovery can become a luxury active managers can't afford."
"This is pure performance-chasing cowardice dressed up as strategy," argued Lisa Chen, a fintech analyst and outspoken critic of the AI investment frenzy. "Dumping a fundamentally sound leader like Fiserv at a 70% discount to chase overhyped AI narratives is exactly how value managers lose their identity. They've capitulated to the very market irrationality they're supposed to exploit."
"The data point on declining hedge fund ownership is telling," noted David Reeves, an independent market researcher. "It reflects a broader de-risking from traditional fintech as regulatory and competitive pressures mount. Giverny is likely not alone in this reassessment."
The decision forms part of Giverny's broader annual review, where the firm also highlighted its top five holdings for the coming year. The full investor letter can be accessed on the firm's website.