This Stock Has Warren Buffett Writing Billion-Dollar Checks and “Mama Cathie” Foaming At The Mouth

You know you’re onto something when Warren Buffett and Cathie Wood are both writing you a check. It’s like getting your grandma to not only tolerate your tattoos but also fund your tech startup—it just doesn’t happen.

But here we are. Nu Holdings has somehow managed to unite the king of safe, slow value investing with the queen of YOLO investing. If that doesn’t make you want to take a closer look, I’m not sure what will.

(Source: Cheddar Flow)

On one side, you’ve got Warren Buffett, the stock market’s equivalent of a grandpa who still drives the same Buick he bought during the Reagan administration. On the other side, you’ve got Cathie Wood, the cool aunt who rolls up in her Tesla, talking about AI taking over the world and doubling down on Bitcoin because “the future is now.” So, the fact that both of them have backed Nu Holdings is like seeing Bigfoot riding a unicorn.

(Source: Coincu)

Nu Holdings, the parent company of Nubank (Latin America’s largest fintech), has caught the eye of two investors who typically wouldn’t even be at the same party. Buffett’s Berkshire Hathaway poured $1.4 billion into the company since its IPO in 2021 (yes, Mr. Value Investing himself is into a fintech disruptor). Meanwhile, Cathie Wood’s ARK Invest holds a smaller, yet still respectable, $20 million stake in Nu (small potatoes for her, but a clear nod to the company’s potential to disrupt the banking industry).

Buffett, known for sticking to boring-but-profitable companies, made an exception here. Why? Probably because Nubank’s digital-first, low-cost model is shaking up Latin America’s old-school banking system. (And let’s face it—if Buffett’s team thinks you’re a threat to traditional banks, you’re doing something right.) The company has accumulated over 100 million users across Brazil, Mexico, and Colombia. 

Nubank is filling a huge gap in Latin America’s banking system by focusing on the underbanked and unbanked (those who traditional banks have basically ignored for decades). While legacy banks are busy catering to the ultra-rich (you know, the ones who can afford a checking account with a private concierge), Nubank is focused on regular people who just need basic banking services without being nickeled-and-dimed to death.

(Source: Nubank)

Nu Holdings isn’t just doing good for its customers—it’s raking in the cash for investors, too. Analysts expect earnings to grow 73% this year and another 43% by 2025. And if that’s not enough, revenue is projected to jump 30%, which is about as close to a guaranteed win as you can get in the volatile world of fintech. Once people start using Nubank, they don’t leave (probably because it’s saving them from traditional banks’ outrageous fees).

In Brazil alone, Nubank already serves nearly half of the adult population. So, if you’re a traditional bank in Brazil, you’re probably looking for another business to start.

Despite all this insane growth, Nu Holdings is currently trading at just 32 times forward earnings. Sure, that might sound a little high, but compared to its previous triple-digit valuations, it’s practically a bargain. And for those of you kicking yourselves for missing the 60% stock surge earlier this year, don’t worry—a recent pullback has made the stock even more attractive.

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