Is Nu Holdings' AI-First Strategy Accelerating Its Flywheel?

Nu Holdings Ltd. NU has acknowledged AI as a means to enhance risk mitigation and achieve efficient scalability. During the recently reported quarter’s earnings call, CEO David Velez-Osomo emphasized AI-first as the driving force behind low-cost product scalability, showcasing the full value of open finance, enhancing cross-sell and product penetration, and unlocking new revenue streams.

The strategy to pivot from a digital bank to an AI-native super app can be traced back to the Hyperplane buyout in mid-2024. Since then, the top-line trajectory has steepened favorably, with 2% sequentially growth in the fourth quarter of 2024 and ending with a 14% quarter-over-quarter rise in the third quarter of 2025.

Similarly, the company has 19% sequential growth in its net income and margins expanding 200 basis points. This disproportionate growth, combined with a monthly average cost to serve per active customer below $1, is a testament to solid operational efficiency aiding the scalability.

The CEO also elaborated on how AI is improving management’s ability to understand customer perception and their financial needs, allowing them to deliver bespoke recommendations.

NU’s customer growth is a testament to the AI-first strategy’s strength, where it has added 4.3 million customers in the third quarter of 2025, taking the total count to 127 million. This lofty figure has taken the monthly average revenue per active customer to $13.4, with a monthly activity rate of 83%.

The company leverages AI in risk mitigation, and it has disclosed the development of nuFormer, a model that provides a deeper understanding of the customer psyche and can be deployed across critical risks and personalization engines. Initial models were able to upgrade credit card limit policies in Brazil, boosting limits for customers without sacrificing risk appetite.

Nu Holdings’ AI-first strategy is not only an operational upgrade but also a digital banking moat. The company is well-positioned to capitalize on the fintech market by setting a yardstick for efficient data-led financial offerings as soon as the AI-first flywheel scales effortlessly across Colombia and Mexico.

NU’s Price Performance, Valuation & Estimates

The stock has soared 20.2% in six months against the industry’s 26.8% growth. NU’s industry peers Credicorp BAP and Itau Unibanco ITUB have gained 43.8% and 26%, respectively.

6-Month Share Price Performance

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From a valuation standpoint, NU trades at a 12-month forward price-to-earnings ratio of 19.27X, which is significantly above the industry’s 11.16X. NU trades at a premium compared with Credicorp’s and Itau Unibanco’s 11.15X and 8.82X, respectively.

P/E - F12M

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Nu Holdings carries a Value Score of D, while Credicorp and Itau Unibanco carry a Value Score of C.

The Zacks Consensus Estimate for EPS for 2025 is set at 60 cents, which has been revised up 3.4% over the past 60 days. The consensus mark for EPS for 2026 is pinned at 85 cents, which has been revised down 2.4% over the past 60 days.

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NU currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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