It’s a matchup between two innovative and high-growth financial technology (fintech) giants. In one corner, SoFi Technologies (NASDAQ: SOFI) has emerged as a prominent U.S. financial services player enjoying strong demand for its online-based suite of solutions. On the other side, Nu Holdings (NYSE: NU) shares similarities through its digital-native platform, but with a strategic focus on Latin America.
Both companies have been big winners for investors in recent years and are already kicking off 2025 with a solid return year to date. Let’s discuss whether SoFi or Nu Holdings is the better stock to buy now.
SoFi stands out with its comprehensive approach to personal finance, leveraging its expertise in lending products — such as student loans, personal loans, and mortgages — into a one-stop financial hub. The company has been successfully expanding into more-traditional banking services alongside a broader range of financial products, including credit cards and investing options.
The recent trends have been impressive. Based on the latest data, from the third quarter (ended Sept. 30), it now counts 9.4 million members, up 35% over the past year. Members who may have initially signed up for a loan are increasingly adopting new financial services, powering a growth flywheel.
That dynamic was a major theme in 2024, with third-quarter earnings per share (EPS) reaching $0.05, reversing the loss of $0.29 in the prior-year quarter. The company has benefited from the resilient economy in the United States as well as relatively stable consumer credit conditions.
SoFi is projecting 2024 revenue growth of approximately 22.5% compared to 2023, an increase from its previous guidance of around 18%. Moreover, the company has upped its 2024 EPS target to between $0.11 and $0.12, marking a significant turnaround from the negative $0.36 result last year.
Investors confident in the company’s ability to execute a long-term growth strategy and capture market share from legacy banks have a great reason to buy the stock now.
For all the points that make SoFi a potentially attractive investment, Nu Holdings’ stock is perhaps even more compelling. It is larger, serving 110 million customers across Brazil, Colombia, and Mexico, with the majority using the platform as their primary bank. Secular tailwinds in the region such as an expanding middle class and a surge in smartphone penetration have fueled exceptional growth.
In the fintech’s third quarter, revenue increased by 56% year over year on a foreign-exchange (FX) neutral basis. This is a reflection of the growing client base and higher average revenue per active client as customers add more products and services within the ecosystem. Profitability has also been excellent, with adjusted FX-neutral net income in the third quarter reaching $592 million, up from $356 million last year.