American Express vs. Nu: Which Financial Stock Is a Better Buy?

Investors choosing between established prestige and high-growth disruption face a compelling choice in 2026. Comparing American Express (NYSE:AXP) and Nu (NYSE:NU) reveals two distinct ways to capture global financial trends.

American Express relies on its premium brand to serve affluent spenders and large corporate clients worldwide. Meanwhile, Nu has emerged as a powerhouse in digital banking, rapidly acquiring millions of users across Latin America. This comparison examines whether the stability of a credit veteran or the momentum of a digital challenger is the better buy today.

The case for American Express

American Express operates as an integrated payments company, providing credit cards and travel services to individuals and businesses. Its strategy focuses on a premium customer base, which includes strategic partnerships with Delta Air Lines, Marriott International, and Airbnb. While the company serves large corporations, it also caters to small businesses, though it recently identified its portfolios for Amazon as held for sale.

In FY 2025, revenue reached nearly $72 billion, representing growth of approximately 10% compared to the previous year. The company generated a net income of roughly $10.8 billion during this period. This resulted in a net margin of about 16%, reflecting the company's ability to remain profitable while expanding its merchant network to over 170 million locations globally.

As of its December 2025 balance sheet, the company carries a debt-to-equity ratio of 1.7x. This ratio measures total debt relative to shareholder equity, indicating the level of leverage used to fund operations. Its current ratio is approximately 0.3x, which measures its ability to cover short-term liabilities with liquid assets. Free cash flow for the period was nearly $16.0 billion, providing significant capital for dividends and reinvestment.

The case for Nu

Nu operates as a digital financial services platform and is a leader among fintech stocks in Latin America. The company serves over 131 million customers across Brazil, Mexico, and Colombia, while also expanding its money-movement capabilities to dozens of other countries. Its business model prioritizes low-cost digital acquisition and a broad range of banking services without the overhead of physical branches.

In FY 2025, revenue reached approximately $16.3 billion, a significant growth of 45% over the prior year. The company reported a net income of close to $2.9 billion for the fiscal year. This performance led to a net margin of 18.1%, suggesting that the company is effectively scaling its platform while maintaining a higher portion of revenue as profit compared to many traditional banking peers.

According to its December 2025 balance sheet, Nu maintains a conservative debt-to-equity ratio of 0.5x. Its current ratio is roughly 0.6x, indicating its liquidity position relative to immediate financial obligations. Free cash flow for the fiscal year was approximately $3.5 billion. This cash generation supports its ongoing expansion into new markets and the development of new financial products for its massive user base.

Risk profile comparison

American Express faces risks related to its sensitivity to global macroeconomic conditions, as spending declines during economic contractions. The company also navigates an intense competitive landscape against Visa and Mastercard, as well as new digital payment technologies. Furthermore, its dependency on its partnership with Delta Air Lines remains a concentration risk, while global regulatory scrutiny regarding interchange fees continues to pose a threat to its operational flexibility.

Nu operates in regions that often experience high economic and political volatility, which can impact credit quality and customer spending. The company faces significant competition from large, established South American banks and must manage risks associated with currency fluctuations. Additionally, as Nu expands into new territories like the United States, it faces different regulatory hurdles and the challenge of building brand awareness in a more saturated financial market.

Valuation comparison

Both companies trade at identical forward P/E multiples, but American Express offers a lower P/S ratio for value-conscious investors. The Forward P/E compares the stock price to future earnings estimates, while the P/S ratio measures price relative to sales over the past twelve months.

Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

American Express and Nu are two compelling financial investments, and the choice between the two will likely come down to your investment style.

American Express is a global financial powerhouse that operates as both a credit card company and a bank. Its premium lifestyle brand and credit card fees profile tends to attract a higher-income clientele that is generally considered to be relatively resilient, even in the face of macroeconomic uncertainty. And it pays a 1.21% annual dividend yield. For income-focused, conservative investors, it's a solid foundational holding. In fact, it remains one of the largest holdings in Berkshire Hathaway's investment portfolio.

Risk-tolerant, growth-oriented investors may be more keen on Nu, however. It's a technology-forward financial services provider targeting a new generation of consumers in a traditionally underpenetrated market. Revenue and users continue to grow substantially, and despite expanding rapidly, Nu holds relatively little debt on its balance sheet. But investors interested in this growth story must deal with the uncertainty that comes from investing in politically volatile foreign markets. Indeed, Nu stock dropped nearly 17% on Monday as investors reacted to the results of the Brazilian presidential election. Nu is likely established enough to weather the slump, and the pullback could prove an attractive entry point for long-term investors willing to ride out the volatility.

American Express is an advertising partner of Motley Fool Money. Sarah Sidlow has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Airbnb, Amazon, American Express, Berkshire Hathaway, Mastercard, Nu Holdings, and Visa. The Motley Fool recommends Delta Air Lines and Marriott International. The Motley Fool has a disclosure policy.