We came across a bullish thesis on Nu Holdings Ltd. (NU) on Value Investing Subreddit Page by TyNads. In this article, we will summarize the bulls’ thesis on NU. Nu Holdings Ltd. (NU)’s share was trading at $12.45 as of May 2. NU’s trailing and forward P/E were 30.86 and 22.03 respectively according to Yahoo Finance.
A close-up of a busy executive’s hand tapping the screen of a digital device, signifying the development of a digital retail banking solution.
Nubank (NU) stands out not just as a digital bank, but as a disciplined and scalable fintech platform operating in one of the most promising regions in global finance. Having built a formidable customer base of over 90 million users in Brazil at an impressively low customer acquisition cost of just $5, the company is now seeing over 60% of active customers using multiple products, underscoring its deepening customer engagement. The story, however, is increasingly about what lies beyond Brazil. In Mexico, Nu has already become a leading new credit card issuer, and in Colombia, early indicators point to a trajectory similar to its success in Brazil. These are markets dominated by legacy banks, where Nu’s digital-first model and superior customer satisfaction (NPS of 90+) present a significant competitive edge. While the company is also preparing infrastructure for eventual entry into Europe and the U.S., it remains disciplined, expanding only where product-market fit is clear. Financially, Nubank has turned the profitability corner, reporting $2.4 billion in Q4 2024 revenue (up 57% YoY), $360 million in net income with a 15% margin, and four straight quarters of GAAP profitability. Return on equity is in the mid-teens and rising, supported by strong unit economics and increasing operating leverage. With over 60% of its customers generating monthly recurring revenue, Nu is building a sticky, high-margin business. Founder and CEO David Vélez, who retains a large stake and takes only a symbolic salary, has proven to be a rare operator, avoiding many of the excesses typical of VC-backed fintechs. Despite all this, the market continues to value Nu as if it were an early-stage gamble. But the model has already been proven, and its expansion across Latin America is more replication than speculation. With Buffett’s involvement adding further validation, Nu offers asymmetric upside with long-term compounder potential.
Nu Holdings Ltd. (NU) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 79 hedge fund portfolios held NU at the end of the fourth quarter which was 54 in the previous quarter. While we acknowledge the risk and potential of NU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. 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.