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Warren Buffett Announces Retirement, Sells Remaining Nu Holdings Shares
Warren Buffett, renowned for his investment acumen, has made significant news by announcing his retirement during Berkshire Hathaway’s annual meeting. Under his leadership, Berkshire has ascended to the seventh-largest company globally by market capitalization. Investors keenly observe his trading activities, striving to replicate his long-term success. Notably, he has significantly outperformed the market without heavily investing in typical growth stocks, favoring value-heavy choices like Coca-Cola and American Express.
Buffett’s Uncommon Stake in Nu Holdings
Nu Holdings (NYSE: NU), one of Buffett’s less conventional investments, saw Berkshire Hathaway divest its remaining shares recently. This all-digital bank, based in Brazil, has shown impressive growth, outperforming the market with a more than 25% increase in 2025.
Understanding what this investment entails can reveal insights into Nu’s potential for continued outperformance.
Nu Holdings: Growth Opportunities Ahead
Nu is emerging as a major player in the fintech sector with operations across Brazil, Mexico, and Colombia. In Brazil, it boasts 104.6 million members, representing 59% of the adult population. Its expansion potential is particularly strong in Mexico, where it has captured only 12% of the market, with membership up by 70% year-over-year in the first quarter. Meanwhile, in Colombia, where it has recently launched, it has acquired 3 million members.
According to CEO David Velez, “The bigger opportunity here isn’t just to win market share — it’s to expand the market itself.”
Image source: Getty Images.
Nu’s business model proves lucrative, turning initial sales into profits. A new customer tends to generate approximately $5 in revenue; however, as their engagement increases and they utilize more products, this figure can soar above $25. Nu, which is just over a decade old, is quickly closing the gap with traditional banks, which average $43 in revenue per active customer. The fintech’s net income surged 74% year-over-year in the first quarter, while revenue grew by 40%.
Additionally, Nu manages operations efficiently. The company utilizes technology to minimize costs and avoid physical branches, leading to a declining cost to serve per active customer. Management anticipates this trend to persist as they scale.
Last year, Nu announced plans to explore new international markets, laying the groundwork for future growth, while currently focusing on the solid prospects within Brazil, Mexico, and Colombia.
Reasons Behind Buffett’s Nu Holdings Sale
Berkshire Hathaway initially invested in Nu during its pre-IPO funding round in 2021. It is important to note that this choice may not have originated directly from Buffett but rather from one of his investing managers, Todd Combs or Ted Weschler. Buffett has historically avoided IPOs and tech stocks, acknowledging that many successful investments, including Amazon, came from his managers.
Despite being a young growth company, Nu embodies many qualities Buffett values. Its low operating costs enable it to generate high returns, creating a self-reinforcing cycle as it scales and matures in its market.
With a robust financial position as a bank, Nu leverages deposits for investment and loans, generating high profits from interest with minimal overhead.
Berkshire Hathaway divested a significant portion of Nu Stock in the fourth quarter of 2024 and sold its remaining shares in the first quarter of 2025. The reasons for this sale remain unclear, especially since Nu’s stock is currently on the rise. Recently, Buffett also reduced his holdings in Apple, though that remains a substantial part of Berkshire’s equity portfolio, suggesting the Nu sale may not be a cause for alarm.
As Nu continues to innovate in digital financial services, it offers robust growth potential and enjoys relative protection from U.S. tariffs. Thus, it appears positioned for continued appreciation in 2025 and beyond.
Investing Considerations for Nu Holdings
Before investing $1,000 in Nu Holdings, evaluate this:
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John Mackey, former CEO of Whole Foods Market, is a member of The Motley Fool’s board of directors. American Express partners with The Motley Fool for advertising. Jennifer Saibil holds positions in American Express and Nu Holdings. The Motley Fool owns shares in and recommends Amazon and Berkshire Hathaway, as well as recommending Nu Holdings. More details are available in their disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
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