MercadoLibre (MELI) Growth, Palantir (PLTR) Valuation, and Michael Burry's AI Shorts

MercadoLibre's Strong Growth & Strategy

• 🚀 The speaker has been adding to their MercadoLibre (MELI) position due to its strong performance and long-term strategy.
• 📈 MELI reported a 39% year-over-year net revenue increase for Q3 2025, marking its 27th consecutive quarter of over 30% growth.
• 💡 The company's decision to lower free shipping thresholds accelerated unique active buyer growth (26% YoY) and items sold (39% YoY), strengthening its competitive advantage despite short-term margin compression.
• 💰 MELI's fintech business also saw significant growth, with monthly active users up 29% and its credit portfolio increasing by 83% year-over-year.

Palantir's Phenomenal Earnings & High Valuation

• ✅ Palantir (PLTR) reported "absolutely incredible" Q3 results, with US revenue growing 77% year-over-year and US commercial revenue up 121%.
• 📊 The company boasts a Rule of 40 score of 114, significantly outperforming peers, and projects 60% revenue growth for Q4 with 45-46% free cash flow margins.
• ⚠️ Despite strong fundamentals, PLTR stock is down due to its extremely high valuation multiples, such as a 15x price-to-sales and 250x price-to-free cash flow, which the speaker believes prices in excessive future growth.
• 📉 The speaker's discounted cash flow analysis suggests PLTR would need to grow free cash flows by 50% annually for five years and maintain an 80x P/FCF multiple just to achieve market-average returns.

Speaker's Investment Philosophy

• 🎯 The speaker prioritizes fair valuation and aims for roughly 15% annual returns, avoiding highly speculative stocks with excessive future growth priced in.
• 👨‍👩‍👧‍👦 Their investment strategy is focused on consistent wealth growth to support family, rather than chasing high-risk "10-baggers."
• 🤝 The speaker expresses happiness for investors who have profited from PLTR, acknowledging that their personal strategy means missing such runs.

Michael Burry's AI Short Thesis

• 📉 Michael Burry has taken short positions on Palantir and Nvidia, suggesting he believes there's an "AI bubble."
• 📊 Burry's evidence includes slowing hyperscaler cloud growth despite increased capital expenditures, implying diminishing returns on investment.
• 🔗 He also highlights a circular economy risk in AI, where a failure in one key component (like OpenAI's funding) could cause a chain reaction and fundamental deceleration across the sector.

Alex Karp's Response & AI Market Dynamics

• 💬 Palantir CEO Alex Karp reacted strongly to short sellers, emphasizing PLTR's proven profitability and impact, questioning why they target companies with strong economics.
• 💡 Karp argues that not all AI companies are equal, distinguishing PLTR's verifiable cash-generating AI solutions from others that may not improve economics.
• 🗣️ The speaker interprets Burry's short as being primarily about valuation rather than the quality of Palantir's business, despite Karp's emotional defense of the company's mission and performance.