Nu Holdings Ltd., the parent company of digital banking platform Nubank, ended a holiday-shortened trading week on a positive note, with shares closing at $13.13 on Friday. The stock posted a weekly gain of approximately 3.1% from the prior Friday's close of $12.73, as investors cautiously returned after a challenging month of May.
The stock's advance came amid a broader market rally, with Wall Street's major indices reaching record closing highs on Friday. The Dow Jones Industrial Average rose 0.72%, the S&P 500 gained 0.22%, and the Nasdaq Composite added 0.21%, marking the S&P 500's ninth consecutive weekly gain. This favorable macro backdrop provided a tailwind for Nu Holdings and other fintech names.
Strong Revenue and Customer Growth
Nu Holdings reported impressive first-quarter results on May 14, with managerial total revenue reaching $5.315 billion, up sharply from $3.373 billion in the same period last year. Net income climbed to $871.4 million, compared to $557.2 million a year earlier. The company added approximately 4 million new customers during the quarter, pushing its global customer base above 135 million. Brazil remains the largest market with over 115 million customers, while Mexico surpassed 15 million, positioning Nu Holdings in direct competition with Brazil's established banking giants.
Founder and Chief Executive David Vélez emphasized the role of artificial intelligence in the company's credit strategy, stating that Nu is "rebuilding banking around AI." He noted that the company's AI models are enabling it to increase credit limits with "resilience, not just speed."
Credit Quality Concerns Emerge
Despite the strong top-line growth, credit metrics are drawing increased scrutiny from investors. Nu's 15-to-90-day non-performing loan (NPL) ratio rose to 5.0% in the first quarter, up from 4.1% in the fourth quarter. Credit-loss allowances surged 33% sequentially, while the risk-adjusted net interest margin—a key measure of lending profitability after credit losses—declined to 9.5% from 10.5% in the prior quarter.
The competitive landscape remains mixed. Shares of Itaú Unibanco edged up about 0.1% on Friday, while Bradesco slipped 0.7%. U.S. fintech peer SoFi Technologies jumped 7.5%, highlighting how quickly digital-lender sentiment can shift when risk appetite improves.
Macroeconomic Headwinds
Brazil's economic picture adds another layer of complexity. The country's GDP grew 1.1% in the first quarter, driven by consumption and investment, but the stronger-than-expected expansion has clouded the outlook for interest rate cuts. Banco BV chief economist Roberto Padovani noted that rates "may need to remain higher for longer." Brazil's 12-month inflation reached 4.64% in early May, exceeding the central bank's target band, and monetary policy director Nilton David stated that "the central bank has the tools" to pursue its inflation target.
For the week ahead, the key question for Nu Holdings is whether the stock can maintain support around the $13 level. A sustained move higher would signal that investors are focusing on the company's scale, Mexico growth potential, and AI-driven underwriting capabilities. Conversely, a pullback would likely refocus attention on rising credit costs, Brazil's interest rate trajectory, and the May selloff that weighed on the stock.
