So here’s the thing: while most investors are nervously refreshing their portfolios, TradeSmith’s AI just flagged two stocks that deserve a spot on your radar. One’s a fast-growing digital bank that’s basically crushing it in Latin America. The other? A space company that’s way more interesting than it sounds.
Let’s start with the “boring but brilliant” pick: Nu Holdings (NU).
This is the parent company of Nubank, Brazil’s largest digital bank. And before you yawn—hear me out. Sixty percent of all Brazilian adults bank with them. That’s not a niche player; that’s a cultural shift.
Here’s why it matters: Nubank has zero physical branches. Their efficiency ratio sits at 27.9%—compare that to traditional competitors like Banco Bradesco at 47%. In banking, lower is better. That efficiency advantage lets them offer better rates, which means more customers, which means more money. The company now serves 112 million Brazilians, revenues have doubled since 2023, and they’re pulling in 30% returns on equity. That’s three to four times better than rivals.
The stock tanked 20% since January, so it’s trading at just 17X forward earnings. The market’s basically assuming the party’s over. Spoiler alert: it’s not. Nubank is expanding across Latin America and barely scratches the surface of lending products they could offer. Sure, banking is risky—default rates in Latin America are higher, and they’ve got a 9.6% charge-off rate. But they’ve kept a conservative balance sheet and remind me of SoFi and Dave, the digital banks that absolutely nailed it in America. Younger savers don’t want to pay for branches they never use.
Now for the “moonshot” bet: Rocket Lab (RKLB).
Yeah, it’s a space company. Yeah, they lost $200 million last year. But stick with me.
Rocket Lab isn’t just launching rockets anymore. Since 2020, they’ve acquired five companies and transformed into a “space as a service” operation. They design and build spacecraft components—solar panels, batteries, star trackers, the works. In 2025, they made twice as much money from building stuff as from launching stuff.
Here’s what makes them interesting:
The proven business: Their Electron rocket had 75 successful missions in 2025. These target small satellites that don’t fit on SpaceX’s Falcon 9. That’s a real, working business.
The defense contract: They just signed an $816 million deal with the Space Development Agency to build 18 military satellites for missile warning systems. Their backlog jumped 73% to $1.85 billion.
The next-gen rocket: Neutron, their medium-lift rocket, is coming in late 2026. It’s partially reusable and could be a real competitor to Falcon 9.
The timing: The Pentagon just proposed a $1.5 trillion defense budget with a 42% increase to Space Force spending. That’s $71.2 billion headed toward space. Rocket Lab’s exactly the kind of company that benefits.
Oh, and there’s one more thing: SpaceX is going public soon. When that IPO drops, expect retail investors to go nuts for anything space-related. Rocket Lab could ride that wave.
The bottom line: One’s a steady compounder with real growth. The other’s a higher-risk play on defense spending and space mania. Both have legs.
