Is Now the Right Time to Buy Nu Holdings (NU) Before February?

Investors eyeing Nu Holdings (NU) ahead of February 2026 face a compelling mix of technical momentum and fundamental catalysts. While valuation concerns persist, the stock's short-term technical indicators and strategic growth drivers suggest a cautiously optimistic outlook for those willing to navigate near-term volatility.

Technical Momentum: A Mixed but Tilted Signal

Nu Holdings' technical profile reveals a nuanced picture. The stock currently trades at $16.76, above its 50-day simple moving average (SMA) of $16.22 and 200-day SMA of $13.80, both of which signal bullish momentum. The 20-day exponential moving average (EMA) stands at $16.57, slightly below the current price, reinforcing a "Buy" signal. However, the 20-day SMA at $16.81-a key short-term benchmark-creates a conflicting "Sell" signal, indicating potential near-term consolidation.

The Relative Strength Index (RSI) of 54.39 places the stock in "Neutral" territory, suggesting it has exited overbought conditions and may have room to rally further. Meanwhile, the ADX of 12.38-a measure of trend strength-supports a "Buy" recommendation, signaling a defined uptrend. Critical support and resistance levels also favor bulls: the stock must hold above $16.35 to maintain its bullish trajectory, with a projected target of $17.82 if resistance is breached according to Fool analysis.

Fundamental Catalysts: Growth and Regulatory Expansion

Nu's fundamentals provide a strong underpinning for its technical optimism. The company has demonstrated explosive revenue growth, expanding at a compound annual growth rate (CAGR) of 89% from 2021 to 2024, while earnings per share nearly doubled in 2024. Recent regulatory milestones further amplify its potential: a newly secured banking license in Mexico and an application for a U.S. bank charter position Nu to expand its financial services offerings, potentially unlocking new revenue streams. These developments align with the company's long-term strategy to become a global digital banking platform, a narrative that could drive investor sentiment in early 2026.

Valuation Concerns: Overpriced or Justified?

Critics argue that Nu's valuation appears stretched. According to the Excess Returns model, the stock is overvalued by 60.9%, which compares Return on Equity to Cost of Equity. Additionally, its Price-to-Earnings (PE) ratio exceeds the sector average, raising questions about sustainability. However, these metrics may reflect market anticipation of Nu's high-growth trajectory. For instance, its recent revenue acceleration and regulatory progress could justify elevated multiples, particularly if the company continues to execute on its expansion plans.

Risks and Considerations

Investors should remain cautious. A breakdown below the $16.35 support level could trigger a pullback toward the 20-day SMA, testing the stock's resilience. Furthermore, regulatory hurdles in the U.S. bank charter application or macroeconomic headwinds could delay growth expectations. The RSI's neutral reading also implies limited upside pressure in the immediate term, though it avoids overbought conditions that might invite profit-taking according to technical analysis.

Conclusion: A Strategic Buy for the Patient Investor

Nu Holdings presents a high-conviction opportunity for investors who can balance its technical strength with valuation risks. The stock's position above key moving averages, coupled with its regulatory and revenue catalysts, suggests a favorable risk-reward profile ahead of February. However, prudence is warranted: a stop-loss below $16.35 could mitigate downside, while a breakout above $17.82 might validate broader bullish expectations. For those with a medium-term horizon and a tolerance for volatility, Nu's momentum and growth narrative make it a compelling candidate to consider before the end of Q1 2026.