5 Best Stocks Under $20 to Buy According to Hedge Funds

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1. Nu Holdings Ltd. (NYSE:NU)

Nu Holdings Ltd. (NYSE:NU) is one of the best stocks under $20 to buy according to hedge funds. On March 4, UBS analyst Thiago Batista reduced the firm’s price target on Nu Holdings Ltd. (NYSE:NU) from $18.40 to $17.20 and kept a Neutral rating on the stock.

This update comes after the company released its financial results for the fourth quarter. Nu Holdings Ltd. (NYSE:NU) added 4 million customers in the fourth quarter of 2025 and a total of 17 million customers throughout the full year. By the end of December 2025, the company had reached 131 million customers worldwide, which represents a 15% year-over-year increase.

However, earlier, on March 2, Morgan Stanley increased its price target on Nu Holdings Ltd. (NYSE:NU) from $18 to $21 and kept its Overweight rating on the stock.

This update came after the firm hosted an investor roundtable with the company’s CFO after Q4 results. Morgan Stanley pointed out that the discussion reinforced Nu Holdings Ltd.’s (NYSE:NU) “long-term compounding story.” The firm also raised its EPS forecast and noted that the current market expectations are “well behind.”

Nu Holdings Ltd. (NYSE:NU) is a financial technology company that operates a digital banking platform. The company has a fully digital model and offers a wide range of financial services to customers in Brazil, Mexico, and Colombia.

While we acknowledge the potential of NU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than NU and that has a 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 12 Best Under-the-Radar Stocks to Buy According to Hedge Funds and 40 Most Popular Stocks Among Hedge Funds Heading Into 2026.

Disclosure: None.

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