XP · XP Inc.

The thesis

XP Inc. now trades as a wager on Brazil's presidential runoff. The shares rose 84.5% in three months to a 52-week-high close of $30.21 on 8 October 2026, and the 25 October 2026 vote between Flávio Bolsonaro and President Lula decides whether that rerating holds. The case is that a Bolsonaro win would bring lower fiscal risk and lower interest rates, and that cheaper rates would move Brazilian savers from bank deposits into the funds and equities XP distributes.

The business is growing, but slowly next to the share price. XP's second-quarter 2026 release showed net revenue up 9% and net income up 5% year on year. The jump since 5 October 2026 is about politics. The quarterly numbers did not change it.

The narrative is accelerating: XP had its best day ever on 5 October 2026, up about 33% to 34% according to Benzinga and TIKR, and two brokers moved their ratings or targets within three days. With the shares at a 14-day relative strength index (RSI) of 90.6 and the runoff polling as a technical tie, the odds of the shares beating the S&P 500 over three months sit slightly below even.

Bullish and bearish views on XP Inc.

The bull case on XP Inc. (XP), in brief: First round favoured the market's candidate. The bear case: The outcome is close to a coin flip.

Bull case

• First round favoured the market's candidate. Flávio Bolsonaro took 47.03% of valid votes to Lula's 45.16% on 4 October 2026, according to official counts reported by The Rio Times. The final Datafolha and Quaest polls on 3 October 2026 had shown a statistical tie.
• First runoff poll shows a narrow lead. Datafolha on 8 October 2026 showed Bolsonaro at 49% and Lula at 45%, within a margin of error of plus or minus 2 percentage points.
• Rate cuts would help XP's core business. TIKR reported Brazil's Selic benchmark rate at 14% in early October 2026, against a 10% nominal neutral rate projected by JPMorgan. A falling Selic pushes savings toward investment products, and that money flows through brokers like XP.

• UBS sees more room above the close. UBS kept its Buy rating on 8 October 2026 and raised its target to $37 from $25, according to Benzinga and GuruFocus.

Bear case

• The outcome is close to a coin flip. The 8 October 2026 Datafolha lead of 49% to 45% sits within the margin of error. In 2022, the Bovespa jumped 5.5% after Jair Bolsonaro's stronger-than-expected first round, and he then lost the runoff to Lula, as TIKR noted.
• Most of the rerating has already happened. TIKR put XP at 6.9 times forward earnings in June 2026 and 9.5 times at the 2 October 2026 close, before the 33% one-day jump. Its five-year average is about 13 times.
• The operating numbers are modest. Second-quarter 2026 net income was R$1,384 million, up 5% year on year. Total client assets of R$1.535 trillion were up 12% from a year earlier and flat from the prior quarter.
• One upgrade already lags the price. Itaú BBA moved XP to Outperform on 6 October 2026 with a $27 target, which is below the $30.21 close on 8 October 2026.
• The shares were already stretched before the vote. Benzinga flagged XP on 9 September 2026 for an overbought RSI reading, nearly a month before the election gap.

Price setup

XP closed at $30.21 on 8 October 2026 in split- and dividend-adjusted daily closes. That close is the 52-week high and 84.5% above the level three months earlier. The 14-day RSI of 90.6 is at an extreme. Moves to readings like this have often been followed by sharp pullbacks, even when the story holds.

Most of the move came on one session. Benzinga reported the shares up 17.2% to $25.20 before the open on 5 October 2026, with a market value of $10.9 billion. The stock then closed up about a third. That $25 area is where the election rally started. A return there would mean the market had dropped the post-first-round gain.

Crowding is visible. Benzinga listed XP among financials with large options trades on 7 October 2026. Investor's Business Daily's SwingTrader reportedly bought the shares on 17 September 2026 and sold them on 18 September 2026, which shows how short-term the trading interest has been. The quarterly report is outside the next 30 days, so the runoff is the only scheduled event before it.

Catalysts, next 30 days

• 25 October 2026: Brazil presidential runoff. Flávio Bolsonaro faces President Lula. A Bolsonaro win supports the lower-rate, higher-flows case that has driven the rerating. A Lula win removes the reason for most of the October gain.
• Between now and 25 October 2026: further runoff polls from Datafolha and Quaest. These are dated as each pollster publishes them. A lasting move outside the margin of error in either direction would likely move the shares before the vote.
• ~16 November 2026 (est.): third-quarter 2026 results. This falls outside the 30-day window. The report shows whether net inflows held near the second-quarter R$28 billion pace.

What would change the view

A Lula victory on 25 October 2026 breaks the case, because it removes the fiscal and rate story behind the October gain. Before the vote, a run of runoff polls showing Lula ahead outside the margin of error would weaken it. In price terms, a daily close below $25 would put the shares back under the 5 October 2026 pre-market level of $25.20 where the election rally began. That would mean the market no longer expects a policy change.

On the business side, third-quarter 2026 net inflows falling well short of the second quarter's R$28 billion would undercut the claim that client money is already moving toward investment products. A Bolsonaro win followed by no fall in long-term Brazilian rates would also weaken the link between the election and XP's earnings.

What it trades with

XP moves with Brazilian assets. On 5 October 2026, the iShares MSCI Brazil ETF (EWZ) rose about 13%, Nu Holdings rose about 13%, and StoneCo rose 16.33% before the open, according to Benzinga and TIKR. In this group, XP has the highest sensitivity to the election and to the Selic rate. Its peers in the Emerging markets group (SBS, INTR, VEON) have been rising together since early August. INTR is also a Brazilian financial and is likely to react to the runoff in the same direction.

Because the group is rising together, XP gives little diversification against the other Brazil names. A reversal in EWZ after the runoff would hit XP harder than the ETF. The shares also carry Brazilian real currency risk, because XP reports in reais and its shares trade in dollars. A rising US 10-year yield, which Benzinga reported above 5.3% on 5 October 2026, works against emerging-market risk appetite in general.