Julian WestSaturday, Jun 21, 2025 1:38 pm ET

4min read

In a world where artificial intelligence (AI) is rewriting the rules of commerce and tech, AppLovin (APP) and MercadoLibre (MELI) are positioned to outpace Palantir (PLTR) by 2030. While Palantir's valuation has been buoyed by its role in government tech, AppLovin and MercadoLibre are leveraging AI-driven ad tech and e-commerce dominance to build scalable moats and deliver growth that justifies their valuations. Let's dissect the numbers to see why these two stocks are primed to surpass Palantir's $319 billion market cap—and why investors should pay attention now.

AppLovin's is a game-changer in digital advertising. With its proprietary machine learning algorithms, Axon optimizes ad targeting in real time, delivering hyper-personalized ads to 10 million e-commerce businesses. This has fueled to $1.48 billion in Q1 2025, with advertising revenue alone surging 71% to $1.16 billion.

The company's margins are expanding too: operating margins jumped to , up from 12% in 2023, thanks to Axon's efficiency. Analysts project , with a target price of —a 43% upside from current levels.

MercadoLibre's dominance in Latin America's $1.5 trillion e-commerce market is underpinned by its AI-powered logistics and fintech ecosystem. With and a , MercadoLibre is capitalizing on its network effects. Its platform now has , and its credit portfolio grew 75% to $7.8 billion in Q1 2025.

While MercadoLibre trades at a —high by traditional standards—its and suggest this premium is justified. The company's logistics efficiency improvements, like reducing fulfillment costs in Brazil, further solidify its moat against rivals like Amazon.

Palantir's rests on government contracts, which accounted for in Q4 2024. While its Pentagon deal for the was a win, its reliance on U.S. defense spending exposes it to fiscal policy volatility.

With a —higher than AppLovin's 8.2x—the stock is already pricing in perfection. Analysts project only a to 2030, compared to AppLovin's 16% and MercadoLibre's 15%. Its reflects the risks of overvaluation in a cyclical business.

Both AppLovin and MercadoLibre are undervalued relative to their growth trajectories. Their lower P/S ratios and margin expansion trajectories contrast sharply with Palantir's overpriced premium.

AppLovin and MercadoLibre are with AI-powered moats. Their scalable business models—ad tech and e-commerce—are sectors primed for disruption. Meanwhile, Palantir's valuation ceiling and government dependency make it a in a fast-moving AI landscape.

:
- Buy AppLovin (APP) at current levels for $305, targeting $433.85 by 2026.
- Add MercadoLibre (MELI) at $1,650, aiming for $2,402.75 by 2030.
- Avoid Palantir (PLTR) unless its valuation drops to reflect its cyclical risks.

The next five years will separate the winners from the also-rans. Back the companies harnessing AI to dominate their markets—and ignore the overvalued relics.