As market volatility clouds investors’ minds, it’s easy to feel apprehensive about the future. However, **the equity markets are poised for competitive returns over the next decade**, especially for those who hold shares of top companies rather than sell during turbulent times. Instead of cashing out, the smarter strategy is to hold on tight and seek out promising companies that could outperform the market significantly. Two stellar contenders that fit this bill are Roku (ROKU) and MercadoLibre (MELI). Let’s dive deeper into how these companies could lead the charge in the years to come.
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Roku: Streaming towards the Future
Roku kicked off 2025 with a dynamic performance, though recent weeks have seen a **decline in share prices** attributed to less-than-stellar financial results and ongoing tariff concerns. However, beneath these challenges lies a robust ecosystem that continues to flourish. In Q1, Roku reported a **16% year-over-year revenue increase**, reaching an impressive **$1 billion**. The streaming hours also saw a significant rise to **35.8 billion**, an increase of **5.1 billion** from the previous year—an indicator of growing user engagement.
The Network Effect at Play
As more users flock to Roku’s platform, the value of its ecosystem **grows exponentially** for advertisers. This is a perfect illustration of the network effect. During the same quarter, Roku’s platform revenue, which includes advertising sales, surged by **17%**, contrasting with an **11% growth** in its device segment. While Roku remains unprofitable, it reported an improved net loss of **$0.19 per share**, a welcome change from the **$0.35 loss** recorded in Q1 2024.
Long-term Opportunities Ahead
Despite potential near-term volatility, Roku has a history of navigating challenges effectively. Historically, the company has opted to sell devices at a loss to deepen user engagement, thereby fortifying its long-term position. The shift away from cable TV to streaming is expected to continue, creating a myriad of opportunities for Roku. No matter which industry giant leads the way, **advertising dollars will inevitably follow viewers**, equipping Roku with ample revenue growth potential.
Moreover, with a **forward price-to-sales ratio of 2.3**, Roku’s shares are attractively priced for long-term investors. Given its dominance in North America’s connected TV market, they’re likely to remain a solid investment despite short-term fluctuations. **Consider adding Roku shares to your portfolio while planning for the coming decade!**
MercadoLibre: E-Commerce Powerhouse in LatAm
Recognized as the **leading e-commerce solution in Latin America**, MercadoLibre has successfully outmaneuvered both local entrants and formidable competitors, such as **Amazon**. Not just a marketplace, MercadoLibre also offers a comprehensive suite of services—including a fintech platform that shows immense promise. This multifaceted approach has resulted in strong financial performances, enhancing its market position.
Impressive Growth Metrics
MercadoLibre’s stock has soared by **48%** this year. In Q1, it reported a **37%** year-over-year surge in net revenue, reaching **$5.9 billion**. Their **net income** skyrocketed to **$494 million**, climbing by an impressive **43.6%** compared to the prior year. Other critical metrics, including gross merchandise volume and fintech active users, have also shown robust growth. **These performance indicators are what investors have come to expect from MercadoLibre.**
Considerations for Investors
However, it’s important to note the potential risks. MercadoLibre’s **forward price-to-earnings (P/E) ratio of 52.2** nearly doubles the **27.9** average for the consumer discretionary sector, which can flag concerns for investors. Should MercadoLibre underperform relative to expectations, its stock price could suffer. Yet, while economic instability stemming from external factors like trade policies may pose risks, it serves as a reminder of the **vast potential in Latin America’s e-commerce landscape**.
For long-term investors, the huge whitespace in this market presents an unparalleled opportunity. **MercadoLibre’s revenue and profitability are expected to grow significantly over the next decade**. Even amidst valuation corrections, there’s strong confidence that MercadoLibre will continue to outperform the broader market, remaining a compelling addition to any forward-thinking portfolio until **2035 and beyond**.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Prosper Junior Bakiny has positions in Amazon and MercadoLibre. The Motley Fool has positions in and recommends Amazon, MercadoLibre, and Roku. The Motley Fool has a disclosure policy.
