Warren Buffett-backed Tech Stock Up 140% in Just 12 Months

The AI Story No One Is Telling You…

Sponsored

A new tech breakthrough is offering up a once-in-a-lifetime opportunity to cash in BIG for investors… And no, I am NOT talking about AI. In fact, without this ONE tech breakthrough… AI development could stop dead in its tracks. See, AI requires massive amounts of computing power, and we are hitting our limit. Sam Altman, creator of ChatGPT, says their AI is already struggling. “We're so short on GPUs, the less people that use the tool, the better. Which is only ONE of the reasons why I believe that a new breakthrough tech material will soon be known as the most valuable material on Earth. What's even crazier is that this crucial tech material has finally been commissioned for mass production… Yet NO ONE seems to be talking about it! And thanks to a pending patent, this mass production process is completely locked up by just one company! This company has already tested and proven its process. Its production plant is online. Its team of world-leading scientists stands at the ready… And in two years' time, this could be recognized as the most valuable company in the world ready to dominate an $11.5 trillion combined market… That's more than Tesla, Amazon, Apple… And the entire AI market – combined. We are at the foot of this unprecedented opportunity – right now. And experts warn that this company has already begun its uptrend… So if you want to see how to grab your share before the biggest gains are gone for good… Click Here Now!


By The Motley Fool

Warren Buffett's Berkshire Hathaway owns one of the world's most closely followed stock portfolios. Berkshire's top holdings are Apple, Bank of America, American Express, and Coca-Cola, but investors sometimes gloss over the smaller positions that might have more growth potential than those blue chip behemoths.

One of those oft-overlooked stocks is Nu Holdings (NU), a Brazilian digital bank that accounts for just 0.3% of Berkshire's portfolio. Berkshire currently holds 107.1 million shares of Nu, which gives it a 2.3% stake in the company, and that investment might go parabolic in 2024 for a few simple reasons.

What does Nu Holdings do?

Nu is an online-only bank that operates in Brazil, Mexico, and Colombia. It served 93.9 million customers at the end of 2023, compared to 54 million customers just two years ago, and is now the fifth-largest financial institution in Latin America.

Nu initially only provided digital checking and savings accounts, but it subsequently expanded its fintech ecosystem by rolling out credit cards, payment services, business loans, investment tools, and insurance services. That platform is sticky: Its average customer has already signed up for at least four of those offerings.

How fast is Nu growing?

Nu's revenue soared 168% (on a constant currency basis) in 2022 and jumped 63% in 2023. Here's how rapidly it expanded its customer base and increased its monthly average revenue per active customer (ARPAC) over the past year.

Analysts expect Nu's revenue to rise 38% in 2024 and 25% in 2025. Those growth rates should be driven by its expansion into more Latin American markets, its cross-sales of additional services to its existing customers, and climbing interest rates.

But unlike many smaller online banks or fintech companies, Nu isn't sacrificing its margins to gain new customers. In fact, its monthly average cost to serve each active customer actually declined 11% in 2022 and stayed flat in 2023. As a result, its gross margin expanded over the past year while rising rates boosted its net interest margin.

As a result. Nu's adjusted net income surged 2,858% (on a constant currency basis) in 2022 and 469% in 2023. Analysts expect its adjusted EPS to increase by 60% in 2024 and 65% in 2025. Those are stunning growth rates for a stock that trades at 25 times forward earnings.

Why could Nu's stock skyrocket this year?

Nu's stock has rallied nearly 140% over the past 12 months, but it still looks surprisingly cheap relative to its growth rates. Concerns about inflation in Latin America, competition from e-commerce and fintech leaders like MercadoLibre, and the market's hesitancy to embrace growth stocks before interest rates decline all seem to be compressing its valuation.

But over the long term, Nu should still have plenty of room to run as internet penetration and income levels rise across Latin America. It could also lock in more unbanked individuals in the region as it enters less developed markets. If investors recognize those strengths, its stock could attract a stampede of bulls and go parabolic over the next 12 months.


The biggest “tech retirement” stock of the DECADE

Sponsored

What if you could go back to 1997 and invest in Amazon before it became a global retail behemoth? Or transport back to '87 and buy into Apple? Better yet, what would happen if you spun Facebook, Netflix, YouTube, Apple AND Amazon all into one stock… AND you had the chance to get in early while shares were still dirt cheap? Check it out: It's not a fantasy, and you don't need a time machine. Because I've uncovered one stock that is on pace to best ALL FIVE of those tech giants… And right now you've got a short window of time to get in early. I'm ready to tell you all about the BIGGEST “tech retirement” stock of the decade – click here right now…