Each of these stocks has a long growth runway.
Fear over President Donald Trump’s new tariffs has subsided, at least in the stock market. April lows have disappeared into a thriving bull market, and the S&P 500 is up more than 11% year to date.
Things could change next week when the Federal Reserve meets and considers an interest rate cut. If it does end up reducing interest rates, which it has indicated that it will, the market is likely to greet the news positively. If for some reason it doesn’t, or if it offers any kind of negative assessment of the economy, it could sink the markets again.
But that’s life in the markets. There are always going to be periods of uncertainty and volatility as well as dips, corrections, and crashes. But the overall arc has always been upward, and investing today is a vote of confidence in the future.
If you’re looking for excellent stocks that can withstand the oscillations of the market over time, I recommend MercadoLibre (MELI 0.10%), Dutch Bros (BROS -2.66%), and Apple (AAPL 1.82%).
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1. MercadoLibre: E-commerce and fintech
MercadoLibre is a no-brainer for investors looking for long-term growth. It continues to demonstrate incredible performance, but there’s so much further to go.
Although its main business is e-commerce, which is still a phenomenal growth driver, it has expanded to become a complete financial app. The dual focus gives it massive long-term opportunities.
Despite having been in business almost as long as Amazon, it still reports high growth in e-commerce. Its region is underpenetrated, and it’s generating a shift from offline retail to online retail.
Total revenue increased 53% year over year (currency neutral) in the second quarter, and gross merchandise volume of goods sold through its e-commerce marketplace increased 37%. New active customers, the foundation of the consumer shift to e-commerce, increased 35% over last year. Management is upgrading the value proposition to make it worthwhile for new shoppers to try MercadoLibre, and the service recently lowered its threshold for free shipping in Brazil from 79 Brazilian reals to 19. It’s also incorporating more artificial intelligence, and that’s leading to higher engagement, as is infinite scroll, which displays more information on a screen.
MercadoLibre’s fintech platform has even greater potential in underbanked communities. It offers a large assortment of financial services through its digital wallet, MercadoPago, and growth in monthly active users has been at 30% or higher for the past seven quarters.
Another feature I like a lot about this company is its varied markets. It operates in 18 Latin American markets, and they’re not all the same. Last year, it was experiencing pressure in Argentina, historically its largest market, but that was offset by success in Brazil and Mexico, its other two largest markets. That kind of hedge gives MercadoLibre stability even as some of its markets look risky.
2. Dutch Bros: Growing its brand in coffee
Dutch Bros is almost as old as Starbucks, but it’s been a small chain concentrated in Oregon. Although it’s been expanding slowly for years, it made a clever move when the pandemic shifted coffee shop consumption behaviors to ride the tide and take its drive-thru coffee concept national.
The original pilot, bringing the chain south through California, was extremely successful. The company took it up a notch with some very smart decisions to bring in new management and try new store formats as it keeps moving east, and it’s been a roaring success.
When you hear coffee, you might be envisioning steaming hot cups. But Dutch Bros’ core beverages are cold drinks and energy drinks. It offers customized beverages featuring all kinds of flavors and shots, and it has carved out a significant and growing niche in this space. Customers love it, and the future looks wide open.
The results speak for themselves. Revenue increased 28% year over year in the second quarter, driven by a 6.1% increase in same-store sales. Contribution margin, which measures store profitability, improved from 30.8% to 31.1%, and adjusted net income rose from $31.2 million to $45.5 million.
The investing thesis is made even more compelling by the expansion opportunities. Management recently raised its long-term goal from 4,000 stores to 7,000, a sevenfold increase from today’s store count.
3. Apple: Don’t give up on it
Finally, Apple might seem like a contrarian call today, but its recently stagnating price means that there’s time to buy before it starts to soar again.
The naysayers might point to slowing growth and too much dependence on the iPhone. But Apple doesn’t need a lot of products to generate engagement and high sales. It has developed an incomparable ecosystem of products that work together, plus loyal fans who love its quality and stay in that ecosystem, buying new upgrades and complementary products.
One recent concern has been that it’s not staying competitive in artificial intelligence (AI). It has released a slew of Apple Intelligence services, but it doesn’t seem to have found a breakout AI model like many of its most direct competitors. But I think it’s highly likely that it will come through.
Apple strives to be different, and better, and its AI will reflect that. One recent development just launched for its AirPods Pro earbuds is the ability to translate conversations on the spot. This is the kind of innovation that will make Apple Intelligence stand out.
Apple stock is down 6% this year, trailing the market, and now is a great time for the forward-thinking investor to take a position.