The Rise of Moomoo as a Digital Berkshire Hathaway: Can Commission-Free Trading Sustain Value?

The brokerage industry is undergoing a seismic shift. While Berkshire Hathaway (BRK.A) has long been the poster child of value investing, its digital counterpart, Moomoo, is rewriting the rules of financial services with a commission-free model. But can Moomoo's rapid growth and user-centric strategy align with the principles of long-term value creation that define Berkshire's legacy? Let's dissect the numbers and risks to find out.

A Tale of Two Business Models

Berkshire Hathaway's success hinges on operating leverage, float growth, and disciplined capital allocation. Its insurance subsidiaries generate a low-cost “float”—premiums collected before claims are paid—that Buffett deploys into undervalued assets. The result is a compounding machine: $334 billion in cash reserves as of late 2024, and a 27% annual operating earnings growth in 2024.

Moomoo, by contrast, bets on network effects and democratized access. Its parent, Futu Holdings, reported a 81.1% YoY revenue surge in Q1 2025 to $603.4 million, fueled by record trading volumes ($413.3 billion) and a 60% YoY jump in client assets to $107 billion. By eliminating commissions, Moomoo attracts price-sensitive retail investors, leveraging data-driven tools (e.g., crypto trading, fractional shares) to deepen engagement.

Scalability: Growth vs. Profitability

Moomoo's advantage lies in its lightweight operating model. Unlike Berkshire's capital-intensive railroads and utilities, Moomoo's costs scale with users, not assets. Its Q1 2025 non-GAAP net income margin of 47% (vs. Berkshire's 19% operating margin) reflects this efficiency. But there's a catch: user acquisition costs (UAC).

While Moomoo's 2.67 million funded accounts (up 41% YoY) are impressive, sustaining this growth requires continuous marketing and product innovation. For example, its New York Mets partnership and Jersey City Marathon sponsorship signal a shift toward brand-building—a costly endeavor. In contrast, Berkshire's UAC is zero: its moat is built on legacy businesses and Buffett's reputation.

Regulatory Risks: The Elephant in the Trading Room

Moomoo operates in 30+ markets, each with unique regulatory regimes. Its crypto trading service, though popular, faces scrutiny in regions like the EU, where asset custody rules are tightening. Meanwhile, cross-border brokerage licenses (e.g., in Japan or Malaysia) require costly compliance.

Berkshire's risks are more structural. Its BNSF railroad faces labor and environmental liabilities, while BHE's wildfire liabilities ($2.75 billion accrued) highlight operational complexity. Yet Berkshire's diversified portfolio and $334 billion cash buffer act as shock absorbers. Moomoo's global footprint, while expansive, lacks such a cushion—it relies on client assets, which can flee during market downturns.

The Value Investing Test

To qualify as a “digital Berkshire,” Moomoo must meet two criteria:
1. Asset-light compounding: Like Berkshire's float, Moomoo must turn user data and trading fees into reinvestable capital. Its 118% YoY growth in wealth management AUM ($17.9 billion) suggests progress here.
2. Margin resilience: Commissions may be gone, but fees for premium tools (e.g., options analysis, money market funds) and wealth management services could offset costs.

However, a key flaw persists: reliance on trading volume volatility. When markets slump, trading activity—and Moomoo's revenue—could crater. Berkshire's insurance float, by contrast, is a steady cash flow regardless of market cycles.

Investment Thesis: Growth vs. Value

Bull case for Moomoo:
- Dominance in emerging markets (e.g., Malaysia's IPO subscriptions, Singapore's HNW investors).
- First-mover advantage in fractional trading and crypto, which could become standardized.
- $107 billion in client assets provide a runway for fee-based revenue diversification.

Bear case:
- UAC inflation: Retaining users may require ever-larger marketing spends.
- Regulatory headwinds: Cross-border brokerage licenses are costly and uncertain.
- Margin pressure: If trading volume plateaus, profit margins could shrink.

Final Analysis

Moomoo's model is a high-octane growth engine, but its sustainability hinges on converting users into profitable, long-term clients. Unlike Berkshire's moated businesses, it lacks a cash-generating “float” and faces volatile revenue. For investors, Moomoo is a speculative bet on fintech disruption, while Berkshire remains a conservative play on compounding capital.

Recommendation:
- Aggressive growth investors: Allocate 5–10% to Moomoo if you believe in its global expansion and regulatory agility.
- Value investors: Stick with Berkshire. Its fortress balance sheet and Buffett's successor, Greg Abel, offer stability in turbulent markets.

The verdict? Moomoo is no Berkshire Hathaway—yet. But in a world where retail investors demand low fees and high accessibility, its trajectory is worth watching closely.

Data as of Q1 2025. Past performance does not guarantee future results.