Eagle Capital Management, an investment management company, released its second quarter 2026 investor letter. A copy of the letter can be downloaded here. In the quarter, Eagle Capital Management discussed how enthusiasm around AI capital spending has driven strong S&P 500 earnings growth while also increasing risks from elevated valuations, concentrated demand, and aggressive investment assumptions. Eagle remains a strong believer in AI but prefers constructing a portfolio that can perform across multiple outcomes rather than relying on one forecast. The firm believes current earnings can overstate underlying economics because semiconductor equipment is depreciated over several years, while free cash flow growth remains much weaker. It also expects competition and additional capacity across AI labs, hyperscalers, and semiconductors to eventually create winners and losers. These dynamics are encouraging Eagle to recycle capital toward attractive opportunities outside the most crowded AI trades while maintaining selective exposure to high quality beneficiaries. The portfolio trades at a 20% market discount with faster expected EPS growth. Please review the Strategy’s top five holdings for key selections.
In its second-quarter 2026 investor letter, Eagle Capital Management highlighted MercadoLibre, Inc. (NASDAQ:MELI). MercadoLibre, Inc. (NASDAQ:MELI) operates online commerce platforms in Brazil, Mexico, Argentina, and internationally. On August 18, 2026, MercadoLibre, Inc. (NASDAQ:MELI) closed at $1,779.14 per share. One-month return of MercadoLibre, Inc. (NASDAQ:MELI) was -1.12% and its shares lost 23.84% over the past 52 weeks. MercadoLibre, Inc. (NASDAQ:MELI) has a market capitalization of $90.62 billion.
Eagle Capital Management stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its Q2 2026 investor letter:
“Operating massive consumer platforms that aggregate demand for sellers and advertisers, these companies have scale advantages, fast growth, and the ability to deploy Al to further press their leads.
Almost half of our capital is in MercadoLibre, Inc. (NASDAQ:MELI), the leading Latin American e-commerce and fintech company. Latin America’s relatively low e-commerce penetration-we estimate it at the mid-teens compared with nearly 30% in the U.S .- offers a long runway for growth. In recent quarters, revenue grew more than 40%. We think the market is too focused on near-term earnings revisions and may be conflating elective investments with structural weakness. Much like Amazon in its early days, MercadoLibre is trading lower margins today for a larger business tomorrow; we’re thrilled with this approach, which both builds value and has enabled Eagle to establish an attractively priced position.
Amazon and MercadoLibre should also benefit more than brick-and-mortar peers, which are unlikely to capture the same benefits from advertising, improvements in consumer search, or gains in warehouse robotic technology. We expect EPS growth of more than 20% over the next several years.”
