Why Nu Stock Plunged 20% in the First Half of the Year

Shares of Nu Holdings (NYSE: NU) stock dropped 20% in the first half of 2026, according to data provided by S&P Global Market Intelligence. There wasn't anything specific of note, but there has been a steady decline in confidence amid increasing competition, worries about the economy, and a rising valuation.

Disrupting traditional banking in Brazil

Nu operates an all-digital bank in its Brazil headquarters as well as in Mexico and Colombia. It has been an incredible success in Brazil, where more than 60% of the adult population has an account on its platform, and it's taking that playbook and expanding into its newer markets.

Image source: Nu.

The company continues to demonstrate robust growth in all of its markets. Since it's already so big in Brazil, the percentage growth in the market is slowing down, but it's still adding millions of new customers annually in what is the largest population in Latin America. Its younger markets are growing faster by rate. In total, it added four million customers in the 2026 first quarter for a total of 135 million. It now has 15 million customers in Mexico and is the third-largest financial institution in the country.

In addition to adding new customers, its strategy is to grow through cross-selling and upselling. That still provides it a long growth runway even in Brazil, where it had primarily attracted a mass audience but is now going after the upper-income population. Average revenue per active customer (ARPAC) increased from $12 last year to $16 this year in the first quarter, and it's worth noting that the increase is inclusive of 16 million new customers over the trailing 12 months.

Many growth levers to pull

Nu has many levers to pull to generate continued growth. It's still capturing market share both in customer count and product adoption in Brazil, where it's already highly penetrated, and it's just getting started in its newer markets. It's getting a proper bank charter in Brazil and Mexico, which widens its market opportunity.

It also received initial approval for a bank charter in the U.S., which could be its next growth market. It obtained naming rights for Miami's Inter CF Soccer stadium, and it's likely to target Latin American-adjacent communities in Southern states.

At the current lower price, Nu stock trades at 22 times trailing 12-month earnings, just above a recent all-time low. Long-term investors with some appetite for risk can view this as an excellent 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.