NU's 8% Surge: Earnings Triumph or Cautionary Rally?

Summary
• Nu Holdings (NU) surges 8.03% intraday to $12.975, breaking its 52-week low of $9.01
• Q2 2025 earnings highlight 85% annualized revenue growth and 123M customers, but 90+ day NPL ratio rises to 6.6%
• Options frenzy: 113M turnover, with 13 contracts trading above 40% implied volatility
• Sector peers like JPMorgan Chase (JPM) fall 0.98%, contrasting NU’s rally

Nu Holdings’ dramatic 8% intraday surge on August 15, 2025, has ignited a frenzy among traders and investors. The stock’s sharp rebound from its 52-week low of $9.01 to $12.975—despite a bearish technical backdrop—has sparked debates about whether this is a sustainable breakout or a short-lived rebound. The Q2 earnings report, while showcasing robust customer growth and profitability, also revealed troubling signs in credit quality and loan origination challenges. With options volatility spiking and leveraged ETFs like ILF and BRAZ showing mixed momentum, the market is at a crossroads.

Earnings Optimism vs. Credit Risk Divergence
Nu Holdings’ 8.03% intraday rally was fueled by a combination of earnings-driven optimism and technical rebound dynamics. The Q2 report highlighted a 4.1 million customer net addition, pushing the total to 123 million, alongside a 42% year-over-year net income increase to $637 million. However, the 90+ day NPL ratio rising to 6.6% and a 50% drop in INSS system loan origination volumes signaled underlying fragility. Traders interpreted the stock’s rebound from its 52-week low as a short-term oversold bounce, amplified by the RSI dropping to 35.12 and MACD turning negative, suggesting a potential reversal. The surge also coincided with leveraged ETFs like ILF (up 0.93%) and FMQQ (up 1.17%) showing relative strength, hinting at broader emerging markets enthusiasm.

Diversified Financials Lag as NU Defies Trend
While Nu Holdings surged, the broader Diversified Financials sector underperformed, led by JPMorgan Chase (JPM) falling 0.98%. This divergence highlights NU’s unique positioning as a digital financial services disruptor, contrasting with traditional banks grappling with macroeconomic headwinds. Leveraged ETFs like iShares Latin America 40 ETF (ILF) and iShares FinTech Active ETF (BPAY) showed modest gains, suggesting regional and fintech-specific tailwinds. However, the sector’s bearish tone, driven by concerns over credit quality and interest rate uncertainty, limits NU’s upside unless it decouples from broader market sentiment.

Options Volatility and ETF Positioning: Navigating the NU Surge
• Technical Indicators: 200-day average: $12.31 (below current price); RSI: 35.12 (oversold); MACD: -0.21 (bearish); Bollinger Bands: $11.76–$13.13 (current price near lower band)
• Key Levels: Immediate support at $12.20 (30D support), resistance at $13.13 (Bollinger upper band). A break above $13.50 could trigger a retest of the 52-week high at $16.15.
• Leveraged ETFs: iShares Latin America 40 ETF (ILF, +0.93%) and Global X Brazil Active ETF (BRAZ, flat) show mixed momentum, suggesting regional exposure may amplify NU’s volatility.

Top Options Picks:
• NU20250822C13 (Call, $13 strike, 8/22 expiration):
- IV: 41.59% (moderate)
- LVR: 43.17% (high leverage)
- Delta: 0.49 (balanced sensitivity)
- Theta: -0.0525 (moderate time decay)
- Gamma: 0.5003 (high sensitivity to price swings)
- Turnover: $584,278 (liquid)
- Why: This call offers a sweet spot between leverage and liquidity, ideal for a 5% upside scenario (targeting $13.63). A 5% move would yield a 22.73% payoff, aligning with the RSI’s oversold bounce.
• NU20250822C13.5 (Call, $13.5 strike, 8/22 expiration):
- IV: 42.50% (moderate)
- LVR: 99.62% (extreme leverage)
- Delta: 0.27 (low sensitivity)
- Theta: -0.0348 (lower time decay)
- Gamma: 0.4054 (moderate sensitivity)
- Turnover: $423,226 (liquid)
- Why: The high leverage ratio makes this contract a speculative play for aggressive bulls. A 5% upside would result in a 0% payoff, but the low delta reduces immediate risk, making it suitable for a breakout above $13.50.

Action Insight: Aggressive bulls may consider NU20250822C13 into a bounce above $13.13, while cautious traders should watch the 200-day average at $12.31 for a potential reversal.

Backtest Nu Holdings Stock Performance
Nu Holdings (NU) experienced a notable surge of 8% intraday, primarily driven by strong financial performance and robust customer growth. The company's recent developments highlight several key factors contributing to its success:1. Strong Financial Performance: Nubank reported a 42% increase in net profit, with a net income nearly tripling to $637 million over the past two years. This impressive growth is underscored by a significant increase in total revenue, reaching $3.67 billion for the three-month period ending June 30, 2025, up from $2.85 billion in the same period last year.2. Customer Growth and Purchase Volume: Nu Holdings saw a 17% year-over-year increase in its customer base, reaching 122.7 million active customers in Q2. This growth in customer base directly translated into higher revenue, with monthly average revenue per active customer at $12.2 in Q2, compared to $11.2 in both Q1 2025 and Q2 2024.3. Loan Growth and Asset Quality: The loan book grew by 8% from the first quarter to $27.3 billion, with personal loans expanding within the overall portfolio. Despite the growth, asset quality remained stable, reflected in the early default ratio of 4.4% and the over-90 day ratio of 6.6%.4. Market Position and Strategic Focus: Nu Holdings' strategic emphasis on expansion and efficiency improvements, along with a strong market positioning in the digital banking sector, has contributed to its positive financial outlook.In conclusion, Nu Holdings' (NU) recent 8% intraday surge reflects its strong financial performance, customer growth, and strategic focus. These factors collectively position the company for continued growth and profitability in the digital banking sector.

NU at a Crossroads: Breakout or False Dawn?
Nu Holdings’ 8% surge has created a pivotal moment for investors. While the stock’s rebound from its 52-week low and oversold RSI suggest a potential short-term reversal, the bearish MACD and elevated NPL ratio cast doubt on sustainability. Traders should monitor the $13.13 Bollinger upper band and the 200-day average at $12.31 as critical inflection points. The sector’s underperformance, led by JPM’s 0.98% decline, adds caution. For now, the NU20250822C13 call offers a balanced leveraged play, but a breakdown below $12.20 could reignite bearish momentum. Watch for a retest of the 52-week high at $16.15 or a breakdown below $12.01 to dictate next steps.