In late 2024, I said in a short video that Sea Limited (SE 3.03%) was the best-performing stock in my portfolio that year, and it wasn't even close. In fact, Sea shares had nearly tripled over the course of the year, fueled by strong revenue growth and a rapid return to profitability.
Although I didn't think the stock was as much of a bargain as it once was, I said it still looked attractively valued relative to its growth.
Image source: Getty Images.
Sea didn't replicate its stellar 2024 performance, but it did gain another 20% in 2025 -- beating the S&P 500's total return by about 2.5 percentage points, even after a late-year pullback. But I'm going to predict that Sea will have its third market-beating year in a row in 2026, and here's why.
Recent results are impressive
Although we don't have full-year 2025 results just yet, Sea's latest numbers show why the stock continues to beat the market. In the third quarter, the company's business posted excellent growth in all three of its main segments.
NYSE: SE
Key Data Points
On the e-commerce side, revenue grew by 35% year-over-year. Monee's (digital finance) outstanding loan balances grew by nearly 70%. And in the digital entertainment (gaming) business -- which was being regarded as Sea's "legacy" business not long ago -- bookings were up by 51%. Overall, Sea's revenue increased by 40% year-over-year, while adjusted EBITDA grew by a stellar 68%.
Still a massive growth opportunity
Beyond the recent numbers, there is plenty of positive momentum that should help fuel growth in 2026. For example, ad revenue in the Shopee business grew by more than 70% and is a high-margin driver of growth. Another example is that the Monee platform is seeing particularly strong momentum in loan growth from outside the Shopee e-commerce platform, and this portion still represents less than 10% of total loans, looking similar to an early stage PayPal (PYPL 2.61%) when it rapidly scaled beyond eBay's (EBAY 1.75%) ecosystem.
The bottom line is that Sea's growth has been excellent over the past couple of years, and its profitability has improved even further. However, it is still in the relatively early stages of capturing its true market opportunities, especially in e-commerce and finance, and there is good reason to be optimistic about its 2026 potential. That's why I'm making the bold prediction that Sea will beat the S&P 500 for the third consecutive year, and by a wider margin than it did in 2025.
