Warren Buffett and Cathie Wood are almost polar opposites as investors, typically owning wildly different stocks. But both own stakes in two stocks: Tesla (TSLA) rival BYD (BYDDF) and Brazilian digital bank Nu Holdings (NU).
Warren Buffett, the billionaire CEO of Berkshire Hathaway (BRKB), is a value investor, buying positions in solid companies on the cheap and holding them for the long term. Many of his holdings are in financials or energy, though his biggest position is in Apple (AAPL).
Cathie Wood, CEO and founder of Ark Invest, also likes to buy stocks that are well off highs. But she tends to favor speculative stocks that have the potential for massive growth, often in new fields. Tesla stock is the most famous example. Her stocks are overwhelmingly in the tech and biomed space.
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But Warren Buffett and Cathie Wood have each found reasons to like China’s BYD and Brazil’s Nu Holdings. Both are profitable leaders in new, growth fields, though electric vehicles and fintechs also could be seen as a new spin on classic industries.
BYD Stock
BYD is easily the world’s largest EV maker, including plug-in hybrid electric vehicles (PHEVs). Tesla narrowly leads BYD in battery-only electric vehicles (BEVs). BYD makes its own batteries, also supplying some rivals, including Tesla. Its batteries also are used for energy storage, and will be a supplier to Tesla’s upcoming Megapack factory in Shanghai.
Its EV sales are likely to approach four million in 2024, up from just over three million in 2023.
BYD also provides handset components and assembly, including for the Apple iPhone.
BYD earnings per share soared up 75% in 2023 after 2022’s 388% surge. Earnings are expected to rise 22% in 2024 with a 24% gain next year.
BYD stock has rallied 40.8% in 2024, soaring in recent weeks to a two-year high.
Even for Warren Buffett, BYD can be called a long-term holding. Berkshire Hathaway first bought a stake in BYD in 2008. Berkshire began selling shares in August 2022, cutting just over half its holding over the next two years. As of July 2024, Buffett owned less than 5% of BYD’s Hong Kong H-shares, below the threshold where it has to disclose further sales.
Cathie Wood’s Ark Invest has a much-smaller stake, worth just $11.64 million as of Friday’s close. That’s vs. $91.31 million in Tesla stock.
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Nu Holdings Stock
Nu Holdings is a Brazilian digital banking platform, also serving Mexico and Colombia. Much of the population in Brazil and across Latin America are “unbanked,” lacking a relationship with a financial institution. That offers huge opportunities for fintechs like Nu Holdings.
Nu Holdings turned profitable in 2023. EPS is expected to surge 96% this year with a further 44% gain in 2025.
Nu Holdings stock has surged 58.8% in 2024. Shares hit a record 15.16 on Sept. 17, but have fallen back below their 50-day line recently.
Buffett bought 107.1 million shares around Nu Holding’s December 2021 IPO. Berkshire Hathaway has never sold any of its position, based on regulatory filings. That was worth about $1.4 billion as of Oct. 4.
Cathie Wood’s Ark also bought NU stock around the IPO. Since then she has added to her position three times and sold shares on seven occasions. Ark Invest currently owns $29.3 million worth of Nu Holdings.
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Warren Buffett Vs. Cathie Wood
Berkshire Hathaway has had a tremendous run since Warren Buffett took control decades ago, and it’s been acting well in 2024.
BRKB stock is up 29.5% in 2024 as of Oct. 4.
Berkshire Hathaway has a $996 billion market cap after briefly joining the $1 trillion club in late August.
Berkshire stock has a new flat base with a 484.82 buy point, finding support near the 10-week line in tight action over the past few weeks. On Oct. 4, BRKB stock popped 2% to 461.97, offering an early entry.
Cathie Wood’s Ark Invest is not publicly traded. Its flagship ETF, ARK Innovation (ARKK), is down 11.1% in 2024. The Nasdaq composite is up 20.8%.
Please follow Ed Carson on X/Twitter at @IBD_ECarson for stock market updates and more.
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