Nu Holdings Ltd. (NU): A Bull Case Theory

We came across a bullish thesis on Nu Holdings Ltd. on Wolf of Harcourt Street’s Substack. In this article, we will summarize the bulls’ thesis on NU. Nu Holdings Ltd.'s share was trading at $13.94 as of August 22^nd. NU’s trailing and forward P/E were 29.68 and 22.94 respectively according to Yahoo Finance.

Nu Holdings (Nu) continued its rapid expansion in Q2 2025, adding 4.2 million new customers to reach 122.7 million, up 17% YoY, with over 100 million active users for the first time. Brazil remains the largest market at 107 million customers, representing 60% of adults, while Mexico added 1 million customers, reaching 12 million, and Colombia nearly tripled to 3.4 million, now approaching 10% market penetration. Total deposits rose 41% YoY (FXN) to $36.6 billion, led by Brazil at $27.8 billion, Mexico at $6.7 billion, and Colombia at $1.3 billion, reflecting strong engagement and expanding wallet share, though deposit costs rose to 91% of interbank rates.

Nu’s credit portfolio grew 40% YoY to $27.3 billion, with credit cards at $18.2 billion, unsecured loans at $6.8 billion, and secured loans at $2.3 billion. Delinquency in Brazil remained resilient, with 15–90 day NPLs falling to 4.4% and 90+ day NPLs at 6.6%, underscoring strong underwriting despite macro concerns. Revenue accelerated 29% YoY to $3.67 billion, driven by customer growth and a record ARPAC of $12.2, while gross profit reached $1.55 billion with sequential margin improvement to 42%. Operating profit rose 21% to $879 million, with expenses growing slower than revenue, reflecting operating leverage. Risk-adjusted NIM improved 100 bps sequentially to 9.2%, reversing prior compression trends.

Nu’s leadership strengthened with strategic hires, including a former Central Bank Governor as Vice Chairman, positioning the company for international expansion and regulatory navigation. The business is transitioning from growth through customer acquisition to monetisation and deeper engagement, aiming to maximise lifetime value via increased wallet share and product usage. FX trends are now favorable, and Nu’s efficient digital platform and resilient credit portfolio provide a robust foundation for continued growth and profitability across Latin America.

Previously we covered a bullish thesis on Nu Holdings Ltd. (NU) by Ray Myers in May 2025, which highlighted strong customer growth, revenue expansion, and monetization potential in Brazil, Mexico, and Colombia. The stock has appreciated approximately 6.2% since our coverage. The thesis still stands as Nu scales its platform. Wolf of Harcourt Street shares a similar view but emphasizes Q2 growth, credit portfolio strength, and strategic leadership hires.

Nu Holdings Ltd. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 80 hedge fund portfolios held NU at the end of the first quarter which was 79 in the previous quarter. While we acknowledge the potential of NU as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.