Muhammad Ali
3 min read
We just published a list of 10 Best Stocks to Buy for a Rising Interest Rate Environment, and Fair Isaac Corp. (NYSE:FICO) ranked 9th on this list.
After a prolonged run of easing speculation, the interest rate outlook has taken a shift. Back in September, the Federal Reserve increased rates by 25 basis points, and economists are now anticipating another rate hike in December, according to a recent Reuters poll. Bond markets have already reacted to yield curve changes, as the 10-year Treasury yield jumped from 3.97% in February 2026 to 5.31% during the first week of October. It came down to 4.98% by the end of October. Fed’s preferred inflation metric, Core PCE, went up by 0.3% during September to its highest reading in a year. Do check Insider Monkey’s list of 10 Stocks Analysts Just Downgraded.
Market participants see this as an uncomfortable mix. Elevated interest rates increase the discount rate on projected earnings, which adversely affects the richly valued growth names. They also take a toll on highly leveraged businesses and make bond-like stocks such as utilities and REITs appear less attractive. We recently provided an expanded list of 10 Buy the Dip Stocks Insiders Are Loading Up On After the Recent Market Sell-Off.
But tightening cycles do not necessarily bring bad news for all businesses. Some segments benefit as rates climb, while others carry strong pricing power and balance sheet strength to navigate through them. Hence, several names are likely to benefit from further monetary tightening by the U.S. Federal Reserve, and Fair Isaac Corp. is one of them. The stock was held by 50 hedge funds as of the Q2 2026 closing, as per the Insider Monkey database.
With a market capitalization of close to $ 15.5 billion, Fair Isaac Corp. (NYSE:FICO) is expected to witness potentially lower mortgage originations and refinancing volume due to rate hikes. However, it would benefit from more prudent credit management as the focus on creditworthiness and credit scores increases in such an environment.
The company’s regulatory moat within the US mortgage credit scoring space weakened back in early September, as the Federal Housing Finance Agency (FHFA) ended a limited pilot program by instructing Fannie Mae and Freddie Mac to accept VantageScore 4.0 from approved mortgage lenders.
However, it still made our recent list of 10 Best 52-Week Low Technology Stocks to Buy According to Analysts, ranking #4. FICO scores continue to be the industry benchmark for loan approvals and creditworthiness investigations. This results in a deep economic moat for the business, making its core operations highly resilient to economic cycles given lenders’ reliance on credit risk metrics.
