The 3 Best Nasdaq-100 Stocks in 2025: Wall Street Says Buy One and Sell the Others

A recent analysis of Nasdaq-100's top performers, Palantir, Zscaler, and MercadoLibre, reveals diverging outlooks based on Wall Street's median target prices. While Palantir and Zscaler are up 69% and 68% year-to-date respectively, their target prices imply downside of 21% and 1%, driven by valuation concerns despite strong growth and market leadership; conversely, MercadoLibre, up 46% year-to-date, has an implied upside of 15%, supported by robust earnings growth and dominance in Latin American e-commerce.

Analysis

An assessment of three top-performing Nasdaq-100 stocks—Palantir Technologies (PLTR), Zscaler (ZS), and MercadoLibre (MELI)—as of June 8 reveals divergent investment outlooks based on Wall Street's median target prices, despite strong year-to-date gains for all three. Palantir, up 69% YTD, faces a potential 21% downside from its $127 share price to a $100 median target, primarily due to its exceptionally high forward price-to-sales ratio, which Jefferies analyst Brent Thill notes would remain the highest in software even if halved; this valuation concern overshadows its impressive Q1 revenue growth of 39% to $884 million, a 62% increase in non-GAAP net income to $0.13 per share, and raised full-year revenue guidance projecting 36% growth in 2025, fueled by AI platform demand. Zscaler, up 68% YTD, shows a marginal 1% implied downside from its $303 share price to a $300 median target, stemming from a high valuation of 93 times earnings against an expected 9% annual adjusted earnings growth through fiscal 2026, despite excellent Q3 FY25 results with revenue up 23% to $678 million, non-GAAP net income up 18% to $0.84 per share, and leadership in the rapidly expanding SSE market. Conversely, MercadoLibre, up 46% YTD, has an implied 15% upside from its $2,485 share price to a $2,875 median target; its Q1 revenue grew 37% to $5.9 billion, GAAP net income rose 44% to $9.74 per diluted share, and Wall Street anticipates 36% annual earnings growth through 2026, rendering its current valuation of 61 times earnings reasonable given its dominant e-commerce market share (28.5%) and thriving fintech operations in Latin America. The provided per-ticker sentiment scores reinforce this divergence, with PLTR at -0.7, ZS at -0.3, and MELI at a positive 0.8.

Key Decisions for Investors

• Investors should critically assess Palantir's current valuation, as the implied 21% downside and extreme price-to-sales ratio suggest potential overvaluation despite strong growth in the AI sector, warranting consideration to trim sizable positions or await a more attractive entry point.
• For Zscaler, the combination of a high earnings multiple (93x) relative to its projected earnings growth (9% annually) and a minimal 1% implied downside suggests a cautious approach, prompting investors to monitor for either valuation compression or significantly accelerated earnings to justify its current price.
• MercadoLibre presents a comparatively favorable risk-reward profile with an implied 15% upside, strong revenue and earnings growth (37% and 44% respectively in Q1), and a valuation deemed reasonable against its 36% projected annual earnings growth, making it a more compelling candidate for investment among the three.