2026 Emerging Market Investing: Three Stocks Positioned for Significant Upside

The coming year presents a compelling case for emerging market investing. Economists project these regions will expand at 4% to 4.5% GDP growth rates, propelled by surging middle-class populations and accelerating digital adoption. This environment creates tailwinds for companies operating in essential services—payments, mobility, delivery, and consumer retail—across rapidly developing economies.

For investors seeking diversified exposure to emerging market growth without concentrating on a single nation’s performance, the following three companies each represent distinct opportunities.

DLocal: Fintech Expansion Across Emerging Economies

DLocal (NASDAQ: DLO) operates at the intersection of emerging market opportunity and digital transformation. The company specializes in payment processing and cross-border transaction solutions for businesses serving developing regions.

Recent financial performance supports bullish positioning. The company achieved accelerating revenue growth through 2025, expanded profitability metrics, and generated record free cash flow—trends analysts expect to intensify in the year ahead. Payment volume figures also set new records, with forecasts predicting continued expansion throughout 2026.

Wall Street is taking notice. Major investment banks including JPMorgan Chase, Goldman Sachs, and HSBC have increased analyst coverage and raised price targets. The consensus view points to approximately 15% upside potential, while higher-end estimates suggest 50% appreciation is possible. Catalysts driving this optimism include new management leadership, turnaround execution, and sharpened financial guidance.

One particularly notable catalyst looms: the 2026 World Cup will likely stimulate travel, tourism, sports betting, and consumer purchases across Latin America and beyond—directly benefiting fintech providers like DLocal that facilitate these transactions.

Grab Holdings: The Southeast Asian Superapp Story

Grab Holdings (NASDAQ: GRAB) dominates Southeast Asia’s “superapp” landscape, bundling ride-hailing, food delivery, and fintech services on a single platform.

The company’s competitive moat consists of first-mover advantage in underpenetrated markets plus substantial R&D investment in emerging technologies. Notably, Grab is piloting autonomous vehicle technology and expects to become Southeast Asia’s first autonomous ridesharing provider once regulatory approval arrives.

Until then, the company maintains double-digit revenue growth while achieving profitability—a increasingly rare combination in growth stocks. Analyst consensus targets 22% upside from current levels, with some institutions forecasting 35% gains. The thesis rests on successful monetization of diverse superapp services, the shift toward profitability, geographic expansion, and growing user adoption.

The long-term picture appears particularly attractive. Analysts model 30% revenue compound annual growth rates through the early 2030s, accompanied by margin expansion. At current valuation multiples, investors patient enough to hold through 2035 may find today’s pricing represents exceptional value relative to potential future earnings power.

Arco Dorados: Value Plus Dividend Exposure

Arco Dorados (NYSE: ARCO) commands a unique position as the planet’s largest independent franchisee of McDonald’s (NYSE: MCD), with operations spanning Latin America and the Caribbean.

After margin compression challenged the stock in 2025, recovery prospects appear constructive for 2026. Management’s strategic framework—summarized as the Four D’s (Digital, Delivery, Drive-thru, Development)—aims to enhance customer traffic, improve convenience, and strengthen unit-level profitability.

Late 2025 already showed improvements. Technology investments and loyalty program rollouts translated into higher foot traffic and better customer satisfaction scores, setting positive momentum entering the new year. These initiatives should continue generating benefits throughout 2026.

From a portfolio construction perspective, Arco Dorados serves emerging market investing in multiple ways. Beyond exposure to EM consumer growth, the stock provides McDonald’s leverage at a meaningful discount to holding the parent company directly. Additionally, Arco pays a reliable dividend yield, adding income component that can moderate volatility and enhance total returns over extended holding periods.

The Emerging Market Investing Case for 2026

These three holdings offer distinct paths to capture emerging market prosperity without depending on any single region’s economic cycle. Whether through fintech infrastructure, digital services, or consumer retail, each company benefits from fundamental shifts reshaping how consumers across developing economies spend, pay, and transact.