2 No-Brainer Fintech Stocks to Buy With $1,000 Right Now

Key Points

• SoFi Technologies is gaining share in the online banking sector in the United States.

• Nu Bank dominates the banking sector in Brazil, and is expanding to Mexico and other countries.

• Both stocks are reliable buys for investors right now.

• 10 stocks we like better than Nu Holdings ›

It is never too late to start investing. Even with the market soaring to new highs seemingly every day at this point, it is better late than never to start optimizing your wealth. If you have $1,000 to buy stocks, don't feel like you've been left behind by those who started before you.

One area of the market that should be of interest to new investors is financial technology (fintech). Digital banks, mobile applications, and other software are disrupting legacy players and gaining market share. Here are two fintech stocks -- SoFi Technologies (NASDAQ: SOFI) and Nu Holdings (NYSE: NU) -- that are no-brainer buys with $1,000 right now.

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SoFi's steady growth

You may have heard of SoFi from its steady drum of commercials, or its sponsoring of the LA Rams NFL stadium. Or, maybe you are one of the millions of people who have started to use its online banking products.

SoFi's user growth has been phenomenal. It currently has 11.7 million members, up from just 3.5 million at the end of 2021.

Customers are rapidly switching to SoFi because of the high interest rates it offers on savings accounts, which consistently lead industry averages. Plus, it offers valued cash back programs for credit cards, personal lending, and loan refinancing solutions that are highly popular. All this can be accessed through SoFi's easy-to-use mobile application, as it aims to become a one-stop shop for an individual's personal finance needs.

Deposit growth has followed suit. The company now has $30 billion in deposits, adding $2.3 billion to its balance sheet last quarter. This is impressive, considering that SoFi only started to accept deposits on its own balance sheet as a full-fledged bank at the start of 2022.

Now, SoFi is beginning to turn the corner when it comes to profitability. Last quarter, net income was $97 million compared to $855 million in revenue. Over the last 12 months, net income was $561.6 million.

With plenty of space to keep adding deposits, SoFi's combination of both growth and earnings power make it an easy starter stock for investors to buy. At a price of just $29, investors can buy multiple shares with $1,000.

Image source: Getty Images.

Nu Bank's Latin American dominance

Nu Holdings is a company similar to SoFi, although it operates in entirely different geographies. The parent company of Nu Bank is the leading mobile banking provider in Brazil, Mexico, and Colombia.

If SoFi's growth were impressive, Nu Bank has grown like SoFi on steroids. The platform has 102 million active customers and $11.66 billion in trailing revenue. Customers utilize Nu Bank for similar reasons to SoFi: its easy-to-use mobile application that leaves legacy players in the dust. In Brazil and Mexico, Nu Bank has far fewer competitors than SoFi in the United States, which is why 60% of the adult population in Brazil is a customer.

In Mexico, Nu Bank is earlier on its business journey, but is showing remarkable growth. Customers have already passed 12 million, with deposits growing 85% year over year to $6.7 billion in the country. Over the next few years, Nu Bank can expand to other countries in Central and South America, such as Argentina or Chile. While no formal announcements have been made, management has alluded to this expansion happening in the future.

Like SoFi, Nu Holdings has flipped from a money loser to generating positive net income. Net income was $2.3 billion over the last 12 months, which is piling up capital on the company's balance sheet that it can use to expand to new markets or return cash to shareholders.

Nu Holdings stock trades at a price of $16 as of this writing on Sept. 23. Along with SoFi, this is a fantastic fintech stock you can buy with $1,000 or less right now.

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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool recommends Nu Holdings. The Motley Fool has a disclosure policy.