What happened?
Shares of digital banking platform Nubank (NYSE: NU) fell 20% in the morning session after President Luiz Inácio Lula da Silva secured an unexpected runoff victory over conservative challenger Flávio Bolsonaro, abruptly unwinding weeks of equity gains predicated on a more business-friendly administration.
Lula won 51.8% of the vote against Bolsonaro's 48.2%, according to official tallies cited by TipRanks. Investors had favored Bolsonaro on expectations that his platform of government spending restraint, corporate tax cuts, and fiscal discipline would curb public debt and allow the central bank to lower borrowing costs, Investing.com reported. Nu carries direct exposure because almost 118 million of its 139 million global customers reside in Brazil, according to the lender's second-quarter Form 6-K regulatory filing with the U.S. Securities and Exchange Commission. Because Nu reports in U.S. dollars, a depreciating real mechanically shrinks translated revenue, while higher-for-longer interest rates risk worsening borrower delinquencies.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Nubank? Access our full analysis report here, it’s free.
What is the market telling us
Nubank’s shares are quite volatile and have had 15 moves greater than 5% over the last year. But moves this big are rare even for Nubank and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 5.8% on the news that UBS analyst Thiago Batista raised the company’s price target to $20.50 from $18.20 while maintaining a Buy rating.
According to StreetInsider, UBS raised Nu’s price target by $2.30 while keeping its Buy recommendation, implying roughly 40% upside from recent trading levels. The higher target refreshes UBS’s valuation framework on the Latin American digital bank without changing the firm’s already constructive stance.
That backdrop matters because Nu’s most recent results showed the business converting scale into earnings: roughly 139 million customers globally, FX-neutral revenue near $5.9 billion, first-time net income of $1.1 billion, and ROE around 33%, with Brazil still the core franchise and Mexico expanding as a full-scale digital bank. Against that setup, the UBS move reads as a valuation catch-up to Nu’s profitability trajectory rather than a fresh upgrade in rating.
Nubank is down 29.3% since the beginning of the year, and at $12.03 per share, it is trading 35.9% below its 52-week high of $18.76 from January 2026. Investors who bought $1,000 worth of Nubank’s shares at the IPO in December 2021 would now be looking at an investment worth $1,165.
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