Nasdaq: Still Funny, Still Potentially Profitable

by

Okay, let’s talk Nasdaq. Ten years ago, it was all cloud computing and cat videos. Now it’s AI and…slightly more sophisticated cat videos. The Nasdaq Composite (^IXIC 0.93%) has averaged a respectable 17% annual return over the last decade, which, honestly, is better than my dating life. It’s currently down 4% year-to-date, meaning it needs a 21% boost by December to hit that average. Ambitious? Sure. But remember, hope springs eternal…especially when there’s potential upside.

Wall Street’s feeling optimistic, projecting 33% and 22% gains for the tech and consumer discretionary sectors. Which, let’s be real, is Wall Street’s way of saying, “We’re still betting on people buying things online.” Those sectors make up 80% of the Nasdaq, so yeah, a December rally isn’t totally out of the question. I’ve seen more improbable comebacks on “The Real Housewives.”

So, where to put your money? Two names keep popping up, and frankly, they’re less annoying than most earnings calls: Nvidia (NVDA 1.56%) and MercadoLibre (MELI 1.24%). Let’s break it down, because, unlike my attempts at mindfulness, I do have a focus.

Nvidia: The AI Gold Rush (and Avoiding the Pickaxe Shortage)

Nvidia just reported earnings that were…robust. Revenue up 73%? That’s not a growth spurt; that’s a full-blown corporate transformation. CEO Jensen Huang says the AI boom is still in full swing, and honestly, who am I to argue with a man who clearly understands exponential growth? Apparently, compute demand is “growing exponentially.” I need that kind of exponential growth in my inbox’s “unsubscribe” folder.

Some investors are worried about AI spending slowing down. Look, everything slows down eventually. Even Beyoncé takes a break. But Wall Street has consistently underestimated AI capital expenditures for the last two years. They thought people would get tired of training algorithms? Bless their hearts. The hyperscalers – Alphabet, Amazon, Meta Platforms, Microsoft, and Oracle – are planning to spend way more than anyone predicted. Like, three-year orders with full prepayment kind of money. It’s like they’re afraid the robots will revolt if the servers go down.

Joseph Moore at Morgan Stanley is calling it a “spending spree.” I’m calling it a good sign for Nvidia. He’s made it his top pick in the semiconductor industry, and frankly, I respect a man who knows a good investment when he sees it. Competition from custom chips (Google’s TPUs, for example) is a concern, but Nvidia’s full-stack strategy – GPUs, CPUs, networking, software – gives it a durable moat. It’s like a corporate castle, only instead of knights, it has engineers.

Wall Street expects Nvidia’s earnings to grow 38% annually over the next three years. That’s monster growth, and at 37 times earnings, the valuation actually looks…reasonable. Analysts think it’s undervalued, with a median target price of $265 per share – a 45% upside from its current price. Which means, if you buy now, you might actually make money. A novel concept, I know.

Loading widget...

MercadoLibre: Latin America’s E-Commerce Powerhouse (and Avoiding Customs Delays)

MercadoLibre runs the largest online marketplace in Latin America, which is, incidentally, the fastest-growing e-commerce market in the world. They accounted for 29% of online retail sales last year, and that number is expected to hit 30% this year. It’s like they’re vacuuming up all the online shopping dollars in the region. And honestly, who can blame them?

But it’s not just the marketplace. MercadoLibre offers a whole ecosystem of services – logistics, digital advertising, financing, payment processing. It’s like they’re trying to be the Amazon of Latin America, only with more salsa. And it’s working. They control a huge chunk of the market, exceeding the combined total of the next 15 competitors. That’s not competition; that’s domination.

They’re also killing it in those adjacent markets. Fastest delivery network in the region? Check. Largest retail advertiser? Check. Largest fintech acquirer in terms of payment volume? Check. Top digital wallet in multiple countries? Double-check. It’s like they’re determined to own every aspect of the Latin American e-commerce experience. And, again, good for them.

So, you’ve got a company sitting at the center of three rapidly growing markets – e-commerce, digital advertising, and digital payments. Wall Street expects earnings to grow 39% annually through 2027, and at 43 times earnings, the valuation is…surprisingly reasonable. Analysts agree, with a median target price of $2,650 per share – a 59% upside from its current price. Which means, if you buy now, you might actually make a profit. I’m starting to like this whole investing thing.

Read More

2026-03-14 10:42