US Expansion Presents Significant Upside Potential for Nu Holdings (NU)

Soumya Eswaran Fri, July 24, 2026 at 8:44 AM EDT 4 min read **

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White Falcon Capital Management, an investment fund manager, released its second-quarter 2026 investor letter. A copy can be downloaded here. The portfolio delivered 8.5% in Q2 2026, trailing the S&P 500 TR's (CAD) 17.3%, MSCI AC TR's (CAD) 16.4%, and the S&P TSX TR's 6.9% returns. The YTD's 1.8% return also trailed the indices. The firm is underwhelmed by the portfolio's performance in the quarter; however, the firm emphasizes long-term performance over short-term results. The firm aims to achieve positive absolute returns adjusted for risk over a complete market cycle. The underperformance is not due to the business fundamentals but the momentum-driven rallies in AI-linked stocks. The firm maintains patience and discipline in capital allocation, with valuation as crucial for long-term returns. In addition, please check the Strategy's top five holdings to know its best picks in 2026.

In its Q2 2026 investor letter, White Falcon Capital Management highlighted Nu Holdings Ltd. (NYSE:NU). Nu Holdings Ltd. (NYSE:NU) is a leading digital banking platform headquartered in São Paulo, Brazil. On July 23, 2026, Nu Holdings Ltd. (NYSE:NU) closed at $14.19 per share, reflecting a market capitalization of $68.55 billion. Nu Holdings Ltd. (NYSE:NU) posted a one-month return of 7.74%, while its shares gained 11.47% over the past 52 weeks.

White Falcon Capital Management stated the following regarding Nu Holdings Ltd. (NYSE:NU) in its Q2 2026 investor update:

"Let's take Nu Holdings Ltd.** (NYSE:NU) as an example. Nu Holdings, a top 5 position in the portfolio for the last three years, is a leading digital financial services platform in Latin America. By combining a technology enabled low cost operating model with prudent risk management, Nu has achieved a rare combination of rapid growth and exceptional profitability. After reaching a high of $18 earlier this year, Nu's shares declined to as low as $11 before recovering to $13.50 per share recently.

The market remains focused on three issues: a potential deterioration in Brazil's credit cycle, political uncertainty ahead of the Brazilian elections, and Nu's expansion into the U.S. Nu is led by one of the strongest management teams in our portfolio, with a long track record of disciplined execution and prudent risk management. IFRS 9 requires banks to recognize expected losses well before a loan becomes non-performing. While this has increased provisions, the data does not yet indicate a deterioration in actual credit losses. The U.S. expansion, on the other hand, may offer significant upside. The market is focused on the near-term costs of building the business, whereas we view those investments as modest relative to the potential opportunity. If Nu can replicate even a fraction of its success in Latin America, the U.S. business could become a meaningful driver of long-term shareholder value." (Click here to read the full text)

** Story Continues Wolfe Research Raises Samsara Target to $45, Maintains Outperform Nu Holdings Ltd. (NYSE:NU) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 104 hedge fund portfolios held Nu Holdings Ltd. (NYSE:NU) at the end of the first quarter, compared to 108 in the previous quarter. While we acknowledge the potential of Nu Holdings Ltd. (NYSE:NU) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock**.

In another article, we covered Nu Holdings Ltd. (NYSE:NU) and shared the list of most promising fintech stocks to buy. In Q1 2026, White Falcon Capital Management expressed an optimistic outlook on Nu Holdings Ltd. (NYSE:NU). In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.