u/Last-Cat-7894

MELI reported "absolutely stupid numbers": 47% FX-neutral revenue growth, 52% TPV growth, and 90% credit portfolio growth, while maintaining profitability and strong net interest margins (23% NIMAL). The market is reacting negatively or indifferently to this phenomenal fundamental performance, causing the stock to sell off from what the author already considered a cheap valuation (~30x EV/EBIT). This disconnect between business performance and stock price creates a compelling entry point. The author believes MELI is a "screaming buy" due to its exceptional growth, profitability, widening moat in a large addressable market (LATAM), and a management team focused on long-term investment over short-term margin optimization. Potential risks include margin compression from aggressive investments (e.g., lower free-shipping thresholds), macroeconomic headwinds in Latin America, and increasing competition.

Adobe produced ~$8.3B in true free cash flow (after SBC) over TTM, giving a ~10% yield at a market cap of ~$83B; revenue growing ~10% with stable margins. The market is pricing in a disruption threat that has not materialized in the numbers, creating a value opportunity where the stock trades at single-digit multiples of GAAP earnings. Buy Adobe at a cheap multiple with a wide safety margin, expecting multiple expansion or continued buyback-driven accretion as disruption fears fail to materialize. Actual disruption from AI competitors (e.g., Canva, generative AI tools) accelerates; CFO departure signals deeper cultural/strategic issues; macro slowdown reduces enterprise software spending.

Current Google/OpenAI data licensing is ~$150M/yr; even top-end renewal scenarios produce only ~$1-1.5B combined. The market is focused on data deals, but the real upside lies in Reddit’s underappreciated advertising growth levers. Long RDDT on the core ads business, not on data-licensing annuity value. Renewal deals disappoint, ad conversion improvements stall, user growth slows, or valuation stays expensive.

The author holds Booking Holdings (BKNG) as a network‑effect “internet economy” stock that is agnostic to AI developments. BKNG dominates online travel booking with strong brand loyalty (Booking.com, Kayak) and a two‑sided network connecting travelers and properties, generating high returns on capital without heavy AI capex. Long BKNG for steady travel demand recovery and resilient cash flows, offering diversification away from AI‑driven names. Travel downturn, regulatory crackdown on short‑term rentals, or competition from Expedia/Google.

The author holds Mastercard (MA) as a core payments/fintech position, citing that it is “reasonably priced” and not dependent on the AI boom/bust. As a network‑effect payment processor with high barriers to entry and recurring revenue, MA benefits from secular digital payment growth regardless of AI capex cycles. Long MA for diversification away from AI; the stock offers steady compounding with minimal direct AI exposure. Regulatory pressure on interchange fees, slower cross‑border volumes, or a broad tech sell‑off that spills over to all high‑multiple stocks.