Down 31%, Is It Finally Time to Buy Nu Stock?

Nu Holdings (NYSE: NU) is a Brazil-based online bank that's disrupting finance in Latin America. The former Warren Buffett stock trades down about 31% from its high early in 2026 despite phenomenal performance. Let's see why it's a great company, why the stock is down, and whether or not this is a buying opportunity.

What's new at Nu

Nu has scaled and become a financial powerhouse in Brazil. It claims more than half of that country's adult population as customers, and it has become the largest private financial institution in the country. It has a high monthly activity rate of 83%, up from 78% in 2022, with 100 million active customers in Brazil.

Image source: Nu.

While the Brazilian market might be saturated, the company still sees significant opportunities to cross-sell and increase engagement. It has less than 7% of the gross profit opportunity, and it's switching gears from focusing on attracting new members to selling more and higher-fee products.

It has plenty of other ways to grow, too, most acutely in expansion. It's making a concerted effort to replicate its Brazil success in Mexico, where its growth is outpacing the initial project in Brazil, and it's taking it up a notch by obtaining a proper bank charter to expand its activities. While it's still onboarding customers in Mexico at a rapid pace -- from 2.1 million in 2022 to 15 million today -- it has less than 1% of the gross profit market share. The Brazil business has been profitable enough to keep the ship afloat and fund new ventures, but the Mexico business broke even in the first quarter, and the investment is starting to pay off.

Nu also operates in Colombia, its next growth market, and it recently received a bank charter in the U.S., where its plans remain to be seen.

High growth, higher risk

Nu's expansion into more markets and more credit products comes with a cost, both in money and in credit exposure. Nu famously has a low cost-to-serve per customer, and it has remained below $1 for the past few years, up until the 2026 first quarter, where it hit $1.

Most any company needs to invest to grow. The market doesn't like to see higher costs, because they increase risk, as does credit exposure. But signing up new groups to credit products, which generally increases default rates, is part of how it can expand and gain market share.

Nu has a long growth runway, and what the market sees as pressure today should lead to a much bigger business and higher stock price down the line. Trading at 21 times trailing-12-month earnings while reporting a 42% year-over-year increase in sales and 41% increase in net income, Nu looks like an opportunity to buy on the dip.

Jennifer Saibil has positions in Nu Holdings. The Motley Fool has positions in and recommends Nu Holdings. The Motley Fool has a disclosure policy.