Is Nu Holdings Ltd. (NYSE:NU) the Best Growth Stock to Buy for the Next 3 Years?

We recently published a list of the 15 Best Growth Stocks to Buy for the Next 3 Years. In this article, we are going to take a look at where Nu Holdings Ltd. (NYSE:NU) stands against other growth stocks to buy for the next 3 years.

On April 29, Dan Ives of Wedbush Securities joined ‘Power Lunch’ on CNBC to discuss his outlook for the tech sector and expressed that tariffs aren’t stopping the AI revolution. According to Ives, the critical question for the sector was whether spending, particularly CapEx, was being maintained. He expressed confidence that CapEx was holding up and predicted that the forthcoming results from big tech companies would serve more as a confidence booster for the market, rather than fueling the existing fears. As some investors are of the idea that concerns about a potential soft patch in the economy remain, there’s a preference for safer investments in insurance and other stable sectors, rather than big tech. However, Ives acknowledged that while uncertainty had been prevalent in recent weeks, his own survey work and field research indicate that AI-related spending stays strong. He noted that, while there were areas of the cloud sector where spending was accelerating, the overall uncertainty would likely result in broad guidance ranges from companies.

Michael Darda, the Managing Director, Chief Economist, and Macrostrategist at ROTH, also believes that AI would generate solid returns in the future. Ives agreed with Darda’s assessment and stated that enterprises were seeing similar advancements and could not afford to leave their AI projects behind without the risk of consequently falling behind. He also pointed out that for companies like those in the MAG7, the AI revolution is a central theme, which is why challenges brought forward by tariffs would not impact the AI revolution as much. Darda changed his outlook from bearish to bullish on tech and AI recently due to his personal experience with AI tools, which he felt had improved over the past year.

Dan Ives reiterated that, despite the uncertainty created by tariffs, the demand for software remained a safety blanket, and spending by hyperscale companies is expected to continue.

Our Methodology

We sifted through financial media reports to compile a list of the top growth stocks to buy for the next 3 years. We then selected 15 stocks with a 3-year revenue compound annual growth rate of over 20%. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024, which was sourced from Insider Monkey’s database.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Nu Holdings Ltd. (NYSE:NU)

3-Year Revenue CAGR: 86.49%

Number of Hedge Fund Holders: 79

Nu Holdings Ltd. (NYSE:NU) provides a digital banking platform that offers spending solutions that comprise the digitally enabled Nu credit & prepaid card. The company also provides transactional Solutions, such as Nu Personal Accounts and a digital account solution for personal financial activities.

Brazil is a growth-generating region for the company. In 2024, Nu added over 1 million customers per month in Brazil, serving 58% of the population and becoming the third-largest financial institution in the country by customer count. Total deposits in Brazil reached $23.1 billion, which was an 11% sequential increase. The secured lending portfolio in Brazil grew by 615% year-over-year to $1.4 billion, which made up 23% of the total lending portfolio.

JPMorgan analyst Yuri Fernandes recently upgraded the rating on Nu Holdings Ltd. (NYSE:NU) from Neutral to Overweight but lowered the price target from $14 to $13 on April 8. Despite anticipating a challenging 2025 due to a potential slowdown in personal loans, Fernandes believes that the risks are already reflected in the current stock price following the global market sell-off.

White Falcon Capital Management stated the following regarding Nu Holdings Ltd. (NYSE:NU) in its Q4 2024 investor letter:

“Nu Holdings Ltd. (NYSE:NU) has recently corrected due to Brazil’s macroeconomic struggles. Nu reports its earnings in U.S. dollars but generates revenue in Brazilian reais, Mexican pesos, and Colombian pesos. The sharp depreciation of these emerging market currencies, coupled with ongoing macroeconomic uncertainty, is making investors uncomfortable. Our due diligence suggests that Nu remains unaffected. Importantly, we continue to believe that Nu is a rare business with a combination of a large market opportunity, a strong moat driven by its superior cost structure, and a brilliant management team.”

Overall, NU ranks 8th on our list of the best growth stocks to buy for the next 3 years. While we acknowledge the growth potential of NU, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.