5 Stocks the Market May Be Underestimating Right Now – Cloudflare, MercadoLibre, Nu Holdings Lead

TLDR

• Cloudflare is moving beyond security into AI infrastructure and developer tools
• Duolingo is expanding from language learning into a broader education platform
• MercadoLibre combines e-commerce and fintech for compounding growth across Latin America
• Nu Holdings is converting fast user growth into real profit with strong operating leverage
• Axon is shifting from hardware to recurring software and cloud revenue

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Five growth stocks — Cloudflare, Duolingo, MercadoLibre, Nu Holdings, and Axon — may be undervalued based on their future earnings potential, not just where they stand today.

Investors who focus only on current earnings can miss companies that are quietly expanding their markets, improving margins, and building stronger business models over time. These five stocks may be examples of exactly that.

Cloudflare: Beyond Security

Cloudflare built its name in internet security and performance. Now it is pushing into network services, developer tools, and AI-related infrastructure.

Cloudflare, Inc., NET

These are higher-value revenue streams. If Cloudflare keeps winning larger enterprise customers and growing its platform sales, future earnings could outpace what many analysts currently model.

The market still tends to price Cloudflare as a premium growth stock with limited near-term upside. But improving product mix and growing operating leverage could change that picture.

Duolingo: A Learning Platform, Not Just an App

Duolingo has shown strong revenue growth, rising engagement, and improving profitability. It is also quietly becoming something bigger than a language app.

Duolingo, Inc., DUOL

The company has expanded into math, music, and other learning categories. That widens its total addressable market well beyond what a single-subject app could reach.

AI is a key variable here. If Duolingo can produce content faster and personalize learning without adding major costs, margins could keep climbing while the user base grows globally.

MercadoLibre: Two Engines in Latin America

MercadoLibre is often described as the Amazon of Latin America, but that framing misses half the story. Its fintech arm — covering payments, credit, and financial services — is growing just as fast as the e-commerce side.

MercadoLibre, Inc., MELI

This dual-engine model builds an ecosystem. Users who shop on the platform are more likely to adopt its financial products, increasing long-term value per customer.

Short-term margin pressure from logistics and credit expansion may worry some investors. But those are the kind of investments that tend to build durable competitive advantages.

Nu Holdings: Profit, Not Just Growth

Nu Holdings has become one of Latin America’s most closely watched digital banks. What separates it from other fast-growing fintechs is that it is also turning growth into actual profit.

Its low cost-to-serve model and rising monetization per user give it real operating leverage. As it expands deeper into Brazil, Mexico, and Colombia, that model could scale efficiently.

The market values Nu mainly as a high-growth digital bank. But if it continues moving into higher-value products, earnings growth could outrun revenue growth.

Axon: From Hardware to Recurring Revenue

Axon is known for TASER devices and body cameras. But software, cloud services, and AI tools are now a growing part of its business.

That shift matters for valuation. Recurring software revenue typically deserves a higher multiple than hardware sales, and it supports more predictable earnings over time.

Axon is also expanding into drones, public safety software, and international markets — all of which represent growth categories that were not part of its story just a few years ago.

Final Thoughts

These five companies are all moving beyond their original products into broader, higher-margin businesses. Valuations are not cheap, but for investors focused on where earnings could be in three to five years rather than today, each one deserves a closer look.

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