Hook - Pick between Inter and Nu for 2026 and you’re deciding between two routes to the same destination: winning financial services share in a large, underbanked region. Nu currently offers a simpler near-term trade. The stock is trading near $16.90 as of 01/02/2026, up materially from the ~ $10.65 area roughly a year ago — a move of roughly +50-60% as the market re-rates the story. That rally has priced in some optimism on profitability, but the valuation still looks reasonable for a company that dominates digital-first banking in Brazil.
Thesis in two sentences - I think Nu is the better tactical play for 2026: it has the clearer narrative for margin expansion and product monetization, and its share-price recovery gives an asymmetrical reward-to-risk for a controlled long. Inter may win operationally in pockets, but publicly available market signals and pricing dynamics favor taking a modest long position in NU now with tight risk controls.
Why the market should care
Nu is a digital bank platform with a suite of consumer financial services - credit cards, personal accounts, investments, loans, insurance, mobile payments, and business accounts - with the bulk of revenue coming from Brazil. The market cares because Latin America remains underpenetrated for modern banking services, and digital platforms can scale customers cheaply once the product-market fit and regulatory setup are in place. That scalability is the underlying fundamental driver for valuation: adding incremental active customers and converting them to higher-margin credit and investment products can drive outsized revenue per user without a proportional increase in fixed costs.
What we know from price action and public signals
- Share price: last traded price is $16.90 (most recent trade), with a prior close of $16.74 and a one-day move of roughly +0.96% as of 01/02/2026.
- Volume: the most recent prior trading day shows a daily volume of ~19.0 million shares, indicating decent liquidity for a trade of a tactical size.
- One-year performance: roughly $10.65 ~1 year ago to $16.90 today — a strong recovery that suggests investors are beginning to price in improved unit economics and top-line resilience.
- Trading range: this year’s trading range has included lows near ~$9 and highs near ~$17.7, giving context for positioning and targets.
Financials - what’s missing and what matters
The dataset provided does not include Nu’s recent GAAP line-by-line financials or a published market cap. Because those line items aren’t in the feed I’m relying on observable market data (price, volume, public commentary) and the company description to build the trade case. That said, public commentary in the news suggests an investor focus on customer growth and profitability — the two levers that will matter for Nu’s 2026 performance.
Valuation framing - pragmatic and qualitative
With peers not present in the dataset, I frame valuation against price history and qualitative logic: NU trades below $20 and well under where many growth fintechs re-rated when profitability was in sight. The stock’s recovery to the $16-17 area after a multi-month consolidation implies the market expects improving margins or at least stabilization in credit performance. Without a market cap or P/E in the dataset, treat Nu as a growth-at-a-discount situation where the discount is a function of macro risk (rates, Brazil FX) and execution risk (credit cycle, CAC, monetization cadence).
Catalysts that could drive 2026 upside
- Profitability beats: faster-than-expected margin expansion from loans and credit-card economics. Analysts and investors will reward any evidence of positive operating leverage.
- Customer monetization: announcements or data showing higher revenue per active customer from investments, insurance, or business accounts.
- Macro tailwinds: a benign Brazilian macro (stable rates and currency) that lowers credit costs and reduces provisioning pressure.
- Regulatory/partnership wins: approvals or commercial partnerships that materially expand TAM - e.g., easier SME product rollouts or new payment rails.
- Institutional re-rating: renewed institutional accumulation and improved sell-side coverage that reduces volatility and expands multiples.
Counterargument
Inter and other competitors are legitimate threats. Inter may have deeper roots in some customer segments, stronger deposit franchises, or better cost-of-funds in pockets — attributes the dataset does not allow us to quantify directly. If Inter demonstrates faster customer monetization, superior deposit economics, or a materially lower cost of funds than Nu, investors could prefer Inter’s equity. In short, Nu’s outperformance is not guaranteed — it depends on execution and macro stability.
Risks (detailed)
- Credit cycle risk: deteriorating consumer credit in Brazil could force higher provisions and undercut margin expansion assumptions.
- Macro / FX volatility: Brazil-specific macro shocks (rates or currency moves) would compress valuation multiples and raise funding costs.
- Competitive intensity: Inter and other fintechs could out-execute on key revenue products, pressuring Nu’s growth and pricing power.
- Execution risk: product rollouts (SME, insurance, investments) might take longer or cost more than forecast, delaying profitability.
- Regulatory risk: changes to consumer protection, interchange fees, or capital rules in Brazil could reduce revenue or increase capital costs.
- Liquidity / market risk: the stock has seen sharp moves (range from ~ $9 to ~$17.7 over the year) — this can amplify stop-outs in volatile markets.
Trade idea - actionable and sized for a discretionary investor
Thesis: Buy NU on strength or small pullbacks as a tactical long for 2026. The market is beginning to pay for improved profitability; I want exposure, but only with strict risk control.
Trade: Long NU (ticker NU)
Entry: 16.50 - 17.25 (primary zone; allow layered entries)
Initial Stop: 14.00 (cut position if price closes below this level)
Target 1: 20.00 (near-term tactical target; ~+18% from last trade)
Target 2: 25.00 (material re-rate if recurring profitability and demonstrable customer monetization)
Position sizing: size so a stop at $14 represents no more than 1-2% of portfolio risk (risk management first)
Time horizon: Position / medium-term (3–12 months) — monitor quarterly trajectory and Brazil macro
Risk level: High - size accordingly
Trade rationale: the entry zone buys the stock below $17 where recent price action and volume indicate market acceptance. The stop at $14 protects against a relapse to the low-teens and limits downside if the market punishes any negative catalysts. The first target at $20 is conservative and achievable if Nu continues to print revenue growth with margin improvement; $25 assumes stronger-than-expected earnings and multiple expansion.
What would change my mind
- If Nu reports clear sequential deterioration in credit metrics or guidance that widens provisions materially, I would exit immediately — that breaks the profitability story.
- If Inter (or another competitor) publicly wins a large SME deposit/processing partnership that meaningfully alters comparative deposit economics, I would favor Inter and reduce NU exposure.
- Conversely, consistent quarter-over-quarter margin improvement and higher revenue per customer would reinforce and potentially widen my targets.
Conclusion - clear stance
I favor a controlled long in NU for early 2026. The stock’s sub-$20 price, recent recovery from the low-teens, and visible liquidity create a compelling tactical trade: buy into a market that is beginning to price profitability, but do it with tight stops because macro and execution risk remain significant. Without peer financials and a market-cap figure in the dataset, this is a pragmatic, risk-aware idea rather than a full valuation-led buy-and-hold endorsement. If you like asymmetric trades where improving execution can produce outsized returns, NU is worth a size-controlled position.
Disclosure: This is a trade idea, not investment advice. Size and stop levels should be adjusted to your portfolio risk tolerance.