Why AppLovin and MercadoLibre Will Surpass Palantir by 2030: A Tale of AI and Valuation
In a world where artificial intelligence (AI) is rewriting the rules of commerce and tech, AppLovinAPP-- (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.
The AI Growth Engine: AppLovin's Axon Platform
AppLovin's Axon AI platform 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 40% YoY revenue growth 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 20% in Q1 2025, up from 12% in 2023, thanks to Axon's efficiency. Analysts project 49% annual earnings growth over the next five years, with a target price of $433.85—a 43% upside from current levels.
MercadoLibre: Latin America's E-Commerce Titan
MercadoLibre's dominance in Latin America's $1.5 trillion e-commerce market is underpinned by its AI-powered logistics and fintech ecosystem. With 67 million unique buyers and a $13.3 billion GMV, MercadoLibre is capitalizing on its network effects. Its Mercado Pago platform now has 64 million monthly active users, and its credit portfolio grew 75% to $7.8 billion in Q1 2025.
While MercadoLibre trades at a 72x P/E ratio—high by traditional standards—its 30% annual earnings growth and $2,402.75 price target 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 Ceiling: Government Dependence and Valuation Risks
Palantir's $319 billion market cap rests on government contracts, which accounted for 55% of its revenue in Q4 2024. While its Pentagon deal for the Maven Smart System (MSS) was a win, its reliance on U.S. defense spending exposes it to fiscal policy volatility.
With a 12.5x P/S ratio—higher than AppLovin's 8.2x—the stock is already pricing in perfection. Analysts project only a 7% CAGR to 2030, compared to AppLovin's 16% and MercadoLibre's 15%. Its 453.9x P/E ratio reflects the risks of overvaluation in a cyclical business.
Valuation Fundamentals: Growth vs. Premium Pricing
| Metric | AppLovin (APP) | MercadoLibre (MELI) | Palantir (PLTR) |
|---|---|---|---|
| Market Cap (2025) | $119.89B | $122B | $319B |
| Revenue Growth (2025) | 40% YoY | 37% YoY | 36% YoY |
| Operating Margin | 20% | 12.9% | N/A (high P/S) |
| P/S Ratio | 8.2x | 10.5x (P/B) | 12.5x |
| 2030 Target (CAGR) | $331B (+183%) | $331B (+171%) | $331B (+7%) |
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.
Risks and Why They're Manageable
- AppLovin: CEO Adam Foroughi's $36 million share sale could spook investors, but institutional ownership at 41.85% signals long-term confidence.
- MercadoLibre: Regulatory scrutiny in emerging markets is a concern, but its network effects and fintech scale provide resilience.
- Palantir: Overdependence on government contracts leaves it vulnerable to budget cuts and geopolitical risks.
Investment Thesis: Allocate to Growth, Not Legacy Tech
AppLovin and MercadoLibre are underappreciated growth engines 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 legacy play in a fast-moving AI landscape.
Actionable advice:
- 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.
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