Most fintech stocks have spent the past few years fighting to stay relevant. But one name is bucking the trend -- and investors can't stop talking about it.
That company is Nu Holdings (NU -5.09%), the parent of Nubank. With more than 120 million customers across Brazil , Mexico, and Colombia, Nu is now the world's largest digital banking platform. Its stock has surged 46% year to date, suggesting investors' optimism.
So what exactly makes Nu stand out?
Image source: Getty Images.
A different kind of bank
Nubank may not be a well-known company in the U.S., but it's increasingly becoming a household brand in Latin America. Its unique business model has enabled it to scale rapidly while turning a profit.
Unlike traditional banks that depend on expensive branches and layers of fees, Nu is entirely digital. Customers open accounts or apply for credit in minutes from their phones, without ever visiting a branch.
For those who are new to the company, here's a simple overview of how the business model works:
- Customers start with a no-fee credit card or digital account, often their first experience with a bank.
- Over time, Nu cross-sells additional products -- loans, savings, investments, and insurance.
- Revenue comes from interest on lending, merchant fees on card payments, and commissions on financial products.
Because Nu's cost to serve a customer is low (under $1 per month), it can undercut rivals on fees while staying profitable. And that's evident in its financials. In Q2 2025, Nu generated $3.7 billion in revenue and $637 million in net income and achieved a 28% return on equity -- a figure that exceeds even the best-run banks globally.
Put it simply: Nu is proving it can grow fast and make money -- a rare combination in fintech.
Tackling Latin America's major banking problems
Latin America has long been one of the most underbanked regions in the world. Millions of adults lacked access to even a basic account, while those who did often faced some of the highest banking fees anywhere.
Nu flipped that model with free accounts, transparent pricing, and a mobile-first experience. For many, Nubank wasn't just a better bank -- it was their first bank. By solving this structural problem, Nu isn't just stealing market share. It's expanding the market, creating a long runway for growth.
Nu is expanding its Horizons
Nu's ambitions don't end in Latin America. CEO David Velez has announced plans to move the company's legal base to the U.K. and is openly considering a push into the U.S. market. That global footprint could give Nu access to deeper capital markets and position it to compete on a broader stage.
But expansion isn't only about geography. Nu also has ample room to grow within its existing customer base:
- Cross-selling potential: Customers typically start with a free account or credit card, but mature cohorts are now generating nearly $27 per customer in monthly revenue, compared with about $12.20 on average. The more products a user adopts -- from loans to insurance -- the more profitable they become.
- Lending growth: Nu's loan book reached $27.3 billion in Q2 2025, up 40% year over year (on a FX-neutral basis). This solid growth suggests that credit remains one of the company's biggest profit drivers.
- Investments and insurance: Nu is gradually moving into asset management and protection products, areas where penetration in Latin America is still low. These adjacencies can deepen customer relationships while boosting margins.
In short, Nu's growth opportunity isn't just about entering new markets -- it's about monetizing its massive existing base more effectively while layering on new products. That combination creates a long runway before Nu ever has to prove itself in the U.S. or Europe.
What does it mean for investors?
People are talking about Nu because it's not just another fintech chasing growth. It's a company that has demonstrated how to profitably scale banking in an underserved market.
With a vast customer base, cost advantages, and a massive growth runway, Nu is one of the most compelling financial growth stories in recent years. That said, investors should keep in mind the risks that come with consumer lending in emerging markets, including credit cycles and regulatory oversight.
For growth investors looking to diversify into international stocks, Nu Holdings might be worth keeping on their radar.
