Unlike developed markets, most emerging markets are thriving, reporting a higher GDP growth rate. The increase of their middle-class population and rapid industrialization have accelerated development and improved living standards. Due to these trends, emerging market stocks can outperform over the long term.

Well-positioned emerging market stocks will benefit from economic growth in their respective markets. Indeed, due to the growth tailwind from an increasing middle-class population, they can increase sales for decades. That is an advantage compared to developed market peers operating in more mature markets.

Also, top emerging market stocks are becoming formidable players in the global markets. Currently, they are challenging developed markets counterparts in the U.S. and Europe and winning. For instance, Chinese companies are dominating the electric vehicle market and pressuring U.S. and European auto makers.

In 2023, emerging market stocks underperformed the S&P 500 index. The iShares MSCI Emerging Markets ETF (NYSEARCA:EEM) is up only 3% year-to-date. However, the following top emerging stocks handily outperformed the S&P 500. Given the revenue growth and earnings momentum, they are likely to repeat this feat in 2024.

MercadoLibre (MELI)

MercadoLibre (NASDAQ:MELI) was up over 100% in 2023, a highlight of the fundamental momentum. The Amazon of Latin America reinforced its market-leading position in 2023 despite competitive threats from other e-commerce players.

Today, the company boasts the number one market position in several markets in Latin America. It leads in Brazil, Argentina, and Mexico, which are its main markets. Revenue growth remains robust in these markets, with net revenue increasing 69% year-over-year in the third quarter of 2023.

Notably, the company has made major inroads in the Mexican market. In Q3 2023, Mexico showed the fastest net revenue growth, up 66% YOY. Additionally, its largest market, Brazil, saw broad-based growth. Gross merchandise volume grew 28% YOY on an FX-neutral basis.

What’s more, MercadoLibre has become a diversified business. Today, it has two business lines, seeing stellar growth. Its fintech business had over 48.8 million active users at the end of Q3, representing 17.3% growth. Parallel to the user growth, fintech revenue growth was 61.1%.

The second growth business is advertising services. The segment has been a notable outperformer, growing over 70% for six consecutive quarters. It’s benefiting from the increased spending on product ads by merchants.

Looking at the bottom line, this e-commerce retailer continues to leverage its scale to drive margin improvements. Additionally, the acquiring business and advertising are helping margins. Heading into 2024, MercadoLibre is one of the top emerging market stocks for 2024.

MakeMyTrip (MMYT)

As India’s largest online travel agency (OTA), MakeMyTrip (NASDAQ:MMYT) has been a beneficiary of the post-pandemic travel spending. The emerging middle class in India and the increase in discretionary income have been a boom.

MakeMyTrip Limited operates in India through MakeMytrip, Goibibo and Redbus. Through these platforms, consumers can book over 70,000 hotels across the country. They also offer other services like rail tickets, car hire, air ticketing, bus tickets and tours. Additionally, the platform offers over 650,000 properties outside India.

The post-pandemic boom in travel spending continues to drive growth. In Q2 FY2024, the company achieved solid top-line and bottom-line growth YOY. Gross bookings exceeded $1.8 billion, increasing 23.8% YOY. Adjusted EBIT increased from $15.5 million to $28.2 million, an 87% YOY increase. This strong performance showed resilient demand amid unprecedented monsoon rains in the country.

MakeMyTrip is one of the top emerging market stocks to buy, given the tailwinds. India is one of the fastest-growing economies, and as GDP per capita increases, spending on travel and experiences will increase. According to McKinsey, India’s tourism spending will surge over the next decade.

To meet the demand, the company is growing its accommodation business. It’s expanding beyond Tier 1 and Tier 2 cities, penetrating beyond metros. It has also added inventory in the homestay segment, adding over 8,000 properties in Q2 FY2024.

Also, the company will benefit from international tourism due to its international air ticketing business and international properties on the platform. Tourism spending will grow faster than GDP over the next decade. MakeMyTrip is well-positioned to capitalize on this growth.

Li Auto (LI)

In 2023, electric vehicle makers have had some headwinds as analysts point to slowing demand. However, the EV market is still in the early innings. Growth is still robust, and this is a secular growth market as EVs replace internal combustion engine vehicles.

Indeed, Chinese automakers have taken the lead and are aggressively investing. As a result, production numbers and deliveries are surging. One of the beneficiaries of this transition is Li Auto (NASDAQ:LI). The automaker sells extended-range electric vehicles with a larger battery pack to support a longer electrically powered range.

Li Auto has reported impressive delivery numbers throughout 2023. As of the end of November 2023, it had delivered 325,677 vehicles. The company has already exceeded its 300,000 vehicle target for the year. November deliveries impressed, reaching 41,030 vehicles, a 172.9% YOY increase.

Deliveries have now exceeded 40,000 vehicles for two consecutive months. Its three L series models, the L7, L8 and L9 models, are seeing solid momentum. Notably, these models are the best-selling premium models in the Chinese market. Indeed, Li Auto is one of the top emerging market stocks to watch.

Piper Sandler expects EV market penetration to rise to 26% by 2025 and 60% by 2030. This steep adoption curve is a revenue tailwind for EV makers like Li Auto. They will benefit as consumers adopt EVs at the expense of ICE vehicles.

On the date of publication, Charles Munyi did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.