Nu Holdings Ltd. (NU): A Digital Banking Gem in Ken Fisher’s 2025 Finance Playbook

As billionaire investor Ken Fisher builds his 2025 portfolio around the global financial sector’s resurgence, one name stands out: Nu Holdings Ltd. (NYSE:NU). Fisher, founder of Fisher Investments, has long emphasized the financial sector’s potential, forecasting a 16% year-over-year growth spurt driven by falling interest rates, surging M&A activity, and a “value gap” in European markets. Nu Holdings, a disruptor in digital banking and payments, fits squarely into this playbook—positioned to capitalize on trends Fisher views as pivotal for 2025 and beyond.

Why the Financial Sector Booms in 2025

Fisher’s bullish stance on financials hinges on three pillars:
1. Macroeconomic Tailwinds: With the Federal Reserve expected to cut rates by 100 basis points in 2025, banks and fintechs like Nu will benefit from widening net interest margins.
2. M&A and Private Markets Surge: Fisher anticipates a rebound in corporate dealmaking, particularly in private credit markets, which could double in assets under management. Nu’s platform, which handles $28.9 billion in deposits (up 55% YoY), is primed to serve this demand.
3. Geopolitical Value Shifts: While the U.S. GDP growth slows to 1.5% in 2025, European markets—currently undervalued—will outperform. Nu’s expansion into Latin America and partnerships like its tie-up with Grab Holdings in Southeast Asia align with Fisher’s “value hunting” strategy.

Nu Holdings: The Digital Banking Catalyst

Nu operates in the high-growth fintech space, offering banking-as-a-service to unbanked populations in Brazil, Mexico, and beyond. Its customer base hit 114 million in 2024, with a 23% YoY rise in Average Revenue Per Active Customer (ARPA) to $10.70. Fisher’s portfolio addition of 7.2 million Nu shares (valued at $98.7 million) in Q3 2024 signals confidence in this trajectory.

Key Growth Drivers:
- Emerging Market Penetration: In Mexico alone, Nu added 10 million customers in 2024, with deposits soaring 438% YoY.
- Product Diversification: Beyond payments, Nu now offers loans, insurance, and wealth management tools, boosting cross-selling opportunities.
- Cost Efficiency: Nu’s 29.9% efficiency ratio (operating expenses/revenue) in 2024 rivals legacy banks, proving its lean digital model works.

Earnings Outlook: Scaling with the Sector

Nu’s Q1 2025 results, due May 13, are expected to reflect this momentum:
- Revenue: $3.2 billion (up 8% QoQ), fueled by Mexico’s rapid adoption.
- Net Income: $707 million, a 45% YoY jump, with EPS hitting $0.13—surpassing the $0.12 analyst consensus.
- Balance Sheet: Total deposits could cross $30 billion, supported by a 22% increase in active customers.

Risks and Challenges

While Fisher’s analysis highlights upside, Nu faces hurdles:
- Margin Pressures: The company’s net interest margin (NIM) has narrowed to 5.5% in 2024, down from 6.3% in 2023, as competition intensifies.
- Regulatory Headwinds: Brazil’s central bank has tightened rules on fintech lending, potentially crimping growth.
- Market Sentiment: Nu’s stock fell 18.9% post-Q4 2024 earnings due to concerns over valuation, now trading at 14x trailing revenue—a premium to peers like PayPal (7x).

Conclusion: A High-Reward Play for Fisher’s 2025 Vision

Nu Holdings embodies the “huge upside” Fisher seeks in financials. With a $20+ billion addressable market in emerging economies, its scale and efficiency could deliver 15-20% annual revenue growth through 2026. Even at current valuations, a bull case scenario—where Nu captures 10% of Brazil’s $150 billion unbanked segment—could push shares to $25+, a 120% premium to recent levels.

Yet investors must weigh risks. Should margin pressures persist or regulatory hurdles stall growth, Nu’s valuation could contract. Fisher’s own portfolio allocation (0.04% of his $230 billion fund) suggests a cautious, long-term stance. For bulls, the bet is clear: Nu’s digital edge and geographic diversification make it a core holding in Fisher’s financial-sector rally—provided the macro winds stay favorable.

In 2025, the financial sector’s renaissance is no mirage. Nu Holdings, with its razor-thin costs and explosive growth in underserved markets, is the kind of disruptor Fisher bets on. The question remains: Can it sustain the momentum? The data so far says yes—but investors must watch margins closely.