The 1 Tech Stock I Think Has More Upside Than Anything Else in the S&P 500 Right Now

The satellite is infatuated with thing artificial quality (AI) oregon vigor successful 2026. These trends person driven the S&P 500 index up 7% twelvemonth to date, contempt fits and starts amid the U.S. struggle successful Iran and the closure of the Strait of Hormuz. Some stocks, including Micron Technology, are up by much than 100% truthful acold this year.

Index money investors person gotten rather affluent successful this environment. But the scale has besides been driven to a precocious price-to-earnings ratio (P/E), with galore stocks trading astatine costly levels. For contrarian investors, present is the clip to look distant from the dense hitters of the S&P 500 to cheaper stocks astir the world.

Here's 1 exertion banal I similar much than thing successful the S&P 500 close now: MercadoLibre (NASDAQ: MELI).

E-commerce acceleration

MercadoLibre is the largest e-commerce subordinate successful Latin America, with a beingness successful each ample system successful the region. Over the years, the institution has compounded its gross successful a akin mode to Amazon, driving maturation by expanding its merchandise enactment and improving the availability of fast, escaped shipping for premium members.

In caller years, contention successful e-commerce successful Latin America has increased, driven by players specified arsenic Amazon. To support its pb successful Brazil and different places, MercadoLibre is pressing the accelerator to connection amended enactment and faster shipping crossed each items sold connected its marketplace. This attack includes lowering escaped shipping thresholds, expanding the fig of cross-border merchants from the likes of China and the United States, and adding first-party selections sourced by MercadoLibre to widen its enactment for consumers.

All of these investments are paying disconnected with accelerating gross growth. For example, successful Brazil, gross merchandise measurement (GMV) sold connected the level grew 38% twelvemonth implicit twelvemonth successful section currency past quarter, its fastest maturation successful 5 quarters. The much measurement processed done MercadoLibre's network, the much leverage it volition get connected its fixed infrastructure costs and escaped transportation benefits.

In the abbreviated run, this concern is starring to borderline compression. Income from operations decreased by 20% past quarter, but, arsenic with Amazon successful the United States, these investments are mounting MercadoLibre up for dependable maturation implicit the adjacent decade.

More monetization layers

What is underrated astir MercadoLibre is the high-margin monetization levers it has built, which it tin furniture connected apical of its e-commerce network. First, there's advertizing revenue, which grew 63% twelvemonth implicit twelvemonth successful section currencies past quarter, faster than wide revenue. This is high-margin gross that tin offset the slim margins successful modular e-commerce and transportation sales.