Two Growth Stocks Poised to Capture Dominant Market Share by 2035

The investment case for both MercadoLibre and Microsoft rests on capturing massive, secular growth in the global digital economy. For the long-term investor, the focus is not on quarterly earnings but on which companies are positioned to own the foundational infrastructure of tomorrow's markets.

MercadoLibre is built for the explosive growth of Latin America's digital economy. The region represents a $1 trillion total addressable market for e-commerce and fintech, a figure that underscores the sheer scale of opportunity. The company's integrated platform-combining its marketplace, logistics arm Mercado Envios, and financial services like Pago and credit-creates a powerful, self-reinforcing moat. This ecosystem approach is already compounding: in its last quarter, revenue grew 33.8% year-over-year, with Argentina alone surging 77% year-over-year to become 22% of revenue. This isn't just growth; it's market capture in a region where digital adoption is still in its early innings. The setup favors long-term compounding as MercadoLibre leverages its scale to deepen user engagement and financial services penetration.

Microsoft's growth, meanwhile, is anchored in the foundational layer of the next technological wave: artificial intelligence. Its Intelligent Cloud segment, which includes Azure, is the engine. For the fiscal year, Azure and other cloud services revenue grew 34% driven by surging demand. This isn't a niche play; it's the infrastructure for an entire economic transformation. The broader economic outlook supports this thesis. While macroeconomic headwinds like demographic slowdowns and tariffs are present, AI investment is seen as a powerful force that will drive productivity and counteract negative shocks over the next five years. Microsoft is not just participating in this AI investment cycle; it is providing the essential compute and platform services that make it possible.

Viewed together, these companies represent two different but equally compelling paths to dominant market share. MercadoLibre is capturing the growth of a vast, under-penetrated regional economy, while Microsoft is building the global digital infrastructure that will power economic growth for decades. The secular trends are clear, and the total addressable markets are immense.

Scalability and Market Penetration: Growth Metrics and Financial Leverage

The financial metrics tell a clear story of scalable growth and deepening market penetration for both companies. For MercadoLibre, the numbers are explosive. In its most recent quarter, revenue surged 33.8% year-over-year, a pace that demonstrates the compounding power of its integrated ecosystem. This isn't just top-line growth; it's market capture in action. The standout performer was Argentina, where revenue jumped 77% year-over-year to become 22% of the company's total. This kind of hyper-growth in a single market highlights the scalability of its model and the vast untapped potential within Latin America's $1 trillion digital economy.

Microsoft's growth, while perhaps less dramatic in percentage terms, is equally powerful in its scale and foundational nature. Its Intelligent Cloud segment, the engine for its AI ambitions, saw revenue grow 21% year-over-year in the fiscal year. The core driver within that segment is Azure, where services revenue grew 34% driven by surging demand. This isn't just revenue expansion; it's evidence that Microsoft is successfully monetizing the massive infrastructure build-out required for the AI era. The financial leverage here is clear: as demand scales, the company is investing heavily in AI infrastructure, which is currently pressuring gross margins, but the underlying revenue growth trajectory is robust.

Valuation multiples reflect these differing growth profiles and market positions. MercadoLibre trades at a forward EV/Sales multiple of ~3.6, a level that looks appealing given its high growth rate. This multiple suggests the market is pricing in significant future expansion within its regional TAM. Microsoft, by contrast, commands a forward P/E of ~40, a premium that acknowledges its global dominance and the long-term, high-margin nature of its cloud and AI services. The P/E ratio is roughly in line with its anticipated revenue growth, indicating the market is paying for its leadership in the foundational layer of the next economic wave.

The bottom line is that both companies are demonstrating scalable models. MercadoLibre is rapidly penetrating a vast, under-penetrated regional market with integrated services, while Microsoft is capturing the global infrastructure spend fueling the AI revolution. Their financials show not just growth, but the leverage and market share gains that define a scalable business.

Catalysts, Risks, and What to Watch

The growth trajectories for MercadoLibre and Microsoft are set to be validated or challenged by a mix of company-specific catalysts, competitive dynamics, and broader economic forces. For investors, the path forward hinges on monitoring specific quarterly metrics and external indicators.

For MercadoLibre, the primary catalyst is the continued execution of its integrated platform strategy across Latin America. The company's ability to compound scale through its marketplace, logistics, and financial services remains the engine. The key risk, however, is intensifying competition, particularly from platforms like Shopee, which can offer lower prices in key markets like Brazil. Management is adapting, for example by adjusting shipping thresholds, but the pressure on pricing and customer acquisition costs is real. The company's success will be measured by its ability to maintain its dominant market share while navigating this competitive fray.

Microsoft's catalyst is the continued monetization of its massive AI investments across its cloud and enterprise offerings. The company's vision for technology success centers on advancing AI infrastructure, and its Intelligent Cloud segment's 34% revenue growth shows this is working. Yet, risks loom. Regulatory scrutiny around AI and cloud dominance is increasing, and the pace of enterprise adoption for new AI tools can be uneven. The company's financial strength, evidenced by its ongoing share repurchase program, provides a buffer, but execution on AI commercialization remains critical.

The bottom line for investors is to watch the numbers. For both companies, quarterly revenue growth rates and market share data are the most direct signals of their scaling power. For MercadoLibre, watch the growth in Argentina and Mexico, and any shifts in user metrics. For Microsoft, monitor Azure's growth and the expansion of AI-related services within its cloud portfolio. At the same time, keep an eye on macroeconomic indicators that could impact consumer spending in Latin America and enterprise IT budgets globally. As one analysis notes, the long-term formula for returns remains buying shares of companies with strong businesses and growth prospects, but the path to those returns will be shaped by these specific catalysts and risks.