Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **Global Theme Machine**, which evaluates the attractiveness of various investment themes across nearly 5,000 listed companies, analyzed by over 200 Citi Fundamental Analysts [1][8]. Core Insights - **Valuation Impact**: The attractiveness of AI themes is currently weighed down by valuation concerns, despite high interest [4][17]. - **Performance Recovery**: After two months of underperformance, the Global Theme Machine model rebounded, with attractive portfolios outperforming by nearly 2% [2][18]. - **Top Themes**: The 'Fintech' sector remains dominant, with **Mobile Payments**, **Digital Currency**, and **FinTech** in the top five themes. The **Space Race** theme was the best performer in December, increasing by nearly 10% [3][4][22]. - **AI Themes**: AI Enablers and AI Adopters rank just outside the top 10, primarily due to valuation issues. AI Enablers are ranked 13th, while AI Adopters are 15th [4][17]. Rankings and Changes - **Top Ranked Themes**: - **Risky Business** remains the top theme, followed by **Mobile Payments**, **Digital Currency**, and **FinTech** [12][40]. - **Infrastructure** has entered the top rankings, replacing **Defence**, which has dropped out of the top 10 [3][12]. - **Bottom Ranked Themes**: - **Greening the Home** continues to be the lowest-ranked theme, focusing on sustainable residential solutions [13][24]. - New entrants in the bottom 10 include **Feminine Health & Fem Tech**, **Biofuels**, and **Immunotherapy** [13]. Performance Metrics - **Monthly Performance**: The MSCI World index showed a return of 0.84% in the last month, with the **Space Race** theme leading at 9.36% [23][24]. - **Underperforming Themes**: Healthcare-related themes, including **Generics & Biosimilars** and **Immunotherapy**, were among the worst performers [24]. Additional Insights - **Theme Mapping**: The Global Theme Machine includes over 90 themes and provides a systematic framework for investors to evaluate and compare these themes quantitatively [8][9]. - **Macro Sensitivity**: The report highlights the macro sensitivities of themes, allowing investors to gauge interest levels and contextualize themes within broader economic conditions [9]. Conclusion - The Global Theme Machine continues to provide valuable insights into investment themes, with notable shifts in rankings and performance metrics. The focus on AI themes, while currently hindered by valuation concerns, remains a point of interest for future investment strategies [1][4][17].

Core Viewpoint - Nu Holdings Ltd. (NYSE:NU) is highlighted as one of the best stocks under $25 to buy, with Goldman Sachs restating its Buy rating and setting a price target of $21, emphasizing strong growth prospects for the digital bank in the upcoming year [1] Group 1: Company Performance - Nu Holdings added 4.3 million customers in Q3 2025, increasing its total customer base to 127 million, which represents a 16% year-over-year growth, showcasing its expanding influence in Latin America's financial sector [2] - The average revenue per active customer (ARPAC) increased to $13, up from $11 the previous year, indicating improved monetization of its customer base [2] Group 2: Financial Outlook - Despite facing pressure from rising interest costs, Goldman Sachs believes Nu Holdings has the potential to enhance its risk-adjusted net interest margins (NIMs), supported by lower risk costs and increased credit ceilings that are expected to drive loan growth [3] Group 3: Company Overview - Nu Holdings is a Brazil-based holding company that offers a range of digital banking services, including customized credit lines, mobile payments, interest-earning savings accounts, and investment products [4]

Industry Overview - The mobile payments market is experiencing rapid growth due to the shift from cash to digital transactions, driven by convenience and security [1][2] - Increased internet penetration and smartphone usage are contributing to the adoption of digital payments, transforming everyday transactions [2] - Industry players are diversifying contactless payment options, including mobile wallets, biometrics, and QR codes, to solidify their market presence and diversify income streams [3] Company Insights Mastercard Inc. (MA) - Mastercard's acquisitions are expanding its addressable markets and driving new revenue streams, with expected net revenue growth of 16% year-over-year in 2025 [7] - The company is leveraging AI technologies across various operations, enhancing security and customer experiences [8] - Mastercard has an expected revenue growth rate of 15.1% and earnings growth rate of 11.8% for the current year [10] Visa Inc. (V) - Visa's strong market position is supported by consistent volume-driven growth, acquisitions, and technological leadership in digital payments [11] - The company has invested $3.5 billion in rebuilding its data platform, which helps prevent $40 billion in fraud attempts annually [14] - Visa has an expected revenue growth rate of 10.8% and earnings growth rate of 12.3% for the current year [14] PayPal Holdings Inc. (PYPL) - PayPal is experiencing robust growth in total payment volume, with strengthening customer engagement and improving monetization efforts on its platform [15][16] - The company is leveraging AI to enhance fraud detection and operational efficiency [17] - PayPal has an expected revenue growth rate of 4% and earnings growth rate of 12.5% for the current year [17] Capital One Financial Corp. (COF) - Capital One's growth is driven by opportunistic acquisitions, including Discover Financial, reshaping its credit card business [18] - The company expects net interest income to rise 31.5% in 2025, supported by solid credit card and online banking operations [19] - Capital One has an expected revenue growth rate of 34.4% and earnings growth rate of 21.9% for the current year [20] Green Dot Corp. (GDOT) - Green Dot operates as a pro-consumer bank holding company, offering products and services through a national distribution platform [21] - The company has three reportable segments: Consumer Services, B2B Services, and Money Movement Services, with revenues derived from various transaction-based services [22] - Green Dot has an expected revenue growth rate of 20.3% and earnings growth rate of -1.5% for the current year [23]

Core Insights - Nu Holdings Ltd. (NYSE:NU) is recognized as one of the 10 Best Mobile Payments Stocks to Buy Now, showcasing strong financial performance in Q2 2025 with a net income of $637 million, reflecting a 42% year-over-year increase on an FX-neutral basis, and revenues rising 40% to $3.7 billion due to customer growth and engagement [1][2] Financial Performance - The company reported an activity rate of 83.2% in Q2, adding 4.1 million new clients, bringing the total to 122.7 million [2] - Monthly revenue per active user increased by 18% year-over-year to $12.2, while the cost of serving remained stable at $0.80 [2] - Gross profit rose 24% year-over-year to $1.55 billion, and deposits surged 41% year-over-year to $36.6 billion, with margins improving to 42.2% [2] Market Presence - In Brazil, Nu Holdings has 107.3 million consumers, representing over 60% of the adult population, while Mexico has 12 million consumers and Colombia has 3.4 million [3] - Deposits in Colombia increased significantly by 841% year-over-year to $2.1 billion [3]

Group 1 - Mastercard Incorporated (NYSE:MA) is recognized as one of the top mobile payments stocks to invest in, attributed to its strong market position and competitive advantages [1][2] - The company benefits from a wide moat in the global electronic payment infrastructure, making it resilient to market changes and competition [1][2] - The transition to electronic payments presents significant growth opportunities, particularly in developing markets, which could further enhance Mastercard's value proposition [2][3] Group 2 - Mastercard operates like a tollbooth, generating revenue through transaction fees regardless of the payment method used, which provides stability against market fluctuations [3]