2 Fintech Stocks That Are Screaming Buys Before 2025
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Nobody knows exactly what the stock market will do in 2025. But you may be able to stack the odds in your favor by adding the two fintech companies below to your portfolio. Investment sage Warren Buffett owns both of them -- and when it comes to maximizing upside potential, these stocks are some of the best you can consider now.
But there are a few risks to be aware of before jumping aboard. So let's dive in and take a closer look at both.
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Never sell this fintech stock
The best investments are the ones you can buy and hold for decades at a time. Nu Holdings (NYSE: NU) is one of those investments. There's a strong chance that the company will continue to grow by leaps and bounds for the rest of your lifetime. That's because its business model is structured to take advantage of a long-term opportunity in an area of the world where it faces little competition from other fintech providers.
In a nutshell, Nu is a bank. But it's not just any bank. Unlike nearly all of its competitors, Nu operates solely through a smartphone, delivering banking, checking, credit card, debit card, insurance, crypto trading, and a whole host of other financial services. Don't other banks do that same thing? Not in the geography where Nu operates: Latin America.
Nu was founded by David Velez, a former employee of Sequoia Capital, one of the most successful venture capital firms in history. When scouting for investment opportunities in the Latin America region, he discovered that the financial services industry was controlled by a handful of stodgy competitors. These banks operated a huge network of costly physical branches, passing on their excess costs to consumers.
In response, Velez founded Nu with the goal of offering its services directly through smartphones. This cut out a lot of costs, and those savings were passed onto its customers.
There was clearly pent up demand for a company like Nu. Over the past decade, it has gone from essentially zero customers to more than 100 million. With more than 650 million residents, Latin America provides a long runway for growth. Competition will heat up over time, and newer markets may not be as lucrative as Brazil, Mexico, and Colombia -- Nu's first three markets. But this is a company that has a recipe for growth, with a proven record of doing so.
Need more proof that Nu is built for the long haul? Warren Buffett has owned more than $1 billion in shares since its initial public offering (IPO). And despite the stock's heavy volatility, he has yet to sell a single share. Shares look pricey at 37 times earnings. But this growth story is just getting started.