Cathie Wood’s Ark Invest Bought 125k Shares of this Buffet-Backed Stock
Cathie Wood's investment firm increased its exposure to Nu Holdings, one of the fastest-growing fintech companies in the world.
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Cathie Wood’s Ark Invest bought over 125,000 shares of Nu Holdings (NYSE: NU) this week. The fintech-focused fund first invested in the digital bank in 2022. The investment has proved to be a lucrative move, given the company’s breakneck growth in recent years, and the latest buy could indicate that Nu Holdings has a lot of runway left in terms of growth.
Nu Holdings, One of the Fastest-Growing Fintech Firms
While Warren Buffett’s skepticism towards digital assets is not much of a secret, it’s noteworthy that one of his few investments in a crypto-related stock has proven to be quite profitable.
Nu Holdings, a South American fintech firm that provides numerous crypto services, has been on a tear last year, surging more than 140% on the 1-year chart.
As one of the fastest-growing players in the very competitive fintech space, Nu Holdings’ stock gains should not be surprising. Roughly 50% of adults in Brazil own a Nubank account, making it the fourth-largest financial institution in that country based on the number of customers. This marks impressive growth for a platform launched less than ten years ago.
As a result of another high-growth year in 2023, Nu saw its customer base exceed 90 million across Latin America. Brazil remains the single-biggest market for the digital bank, with over 85 million users.
Not for the first time, investing legend Warren Buffett recognized Nu’s potential early on. The billionaire’s Berkshire Hathaway (NYSE: BRK.A) injected $750 million into the company in 2021, acquiring 107 million shares. Today, the investment giant’s stake in the company is worth more than $956 million, according to CNBC data.
Earlier this week, Nu Colombia, the bank’s subsidiary in the country, secured regulatory approval to operate as a financing company. Simultaneously, the company’s Mexico-based unit is intensifying its expansion endeavors. It is set to unveil new app features on Wednesday, enabling Mexican clients to receive money from the US through WhatsApp.
Cathie Wood’s Fintech Fund Buys Nu Shares
Warren Buffett is not the only prominent investor bullish on Nu Holdings.
Cathie Wood’s investment fund, the Ark Fintech Innovation ETF, purchased over 125,000 of the bank’s shares on Monday. This is the first time the fund has invested in Nu since selling a portion of its stake in November 2023.
Ark Fintech Innovation ETF bought Nu’s shares several times throughout 2022. Following the latest purchase, the bank’s weighting in the fund now stands at 1.73%, with a market value of just below $19 million.
What are your predictions on Nu’s trajectory in 2024? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
