Last week, Argentina's President Javier Milei won his mid-term elections decisively. The market responded immediately, with Argentina's stock market jumping 21% the same day.

The US government has been watching them closely. Very closely, as the US Treasury has assembled up to $40 billion in financial support for Argentina. Think of it as throwing a lifeline to a chronic overspender who finally got serious about their budget. The US even started buying Argentine pesos directly in the market to show confidence.

Why would America do this? Because Argentina sits on some of the world's largest untapped energy reserves (a gas field called Vaca Muerta) and crucial lithium deposits (the metal that powers electric car batteries). And unlike Brazil, which is increasingly going its own way, Argentina is signalling it wants to play ball with Washington.

In this edition of Impactfull Weekly, we'll look at what could go right, what could go wrong, and which companies stand to benefit most if this transformation sticks.

Milei put the chainsaw down, it’s time to plant something now

(source: Bloomberg)

Understanding the market reaction

To understand what just happened, you need context. Argentine stocks hit all-time highs in January 2025. Then they crashed 50% through September as investors worried Milei might lose his mid-term elections and his reform programme would collapse. When he won last week, markets snapped back to January levels within days.

(source: Marketscreener)

Now, if you zoom out further: Argentina's stock market has rallied roughly 250% over two years. Sounds spectacular, but it started from an extremely low base after decades of mismanagement. The country had been trading like a serial defaulter because, well, it was one.

Here's the key point: the easy money has been made. Future gains will now come from actual execution, not just hope. Investors now need to see a string of wins: Argentina building up its foreign currency reserves (think of this as the country's savings account), fixing its chaotic currency system, and actually converting its natural resources into export dollars.

The US financial support is crucial here. The first $20 billion works like an emergency credit line that calms market jitters and buys time for reforms to take hold. Think of it like having a rich uncle co-sign your loan while you get your finances in order. A potential second $20 billion loan is on the table but depends on Argentina showing real progress.

Why Washington picked Argentina over Brazil

For decades, Brazil was America's automatic choice in Latin America: it’s the biggest economy, has the deepest financial markets and the most diplomatic influence. The US has consistently run trade surpluses with Brazil, signalling deep trade integration. 

Brazil supplies the US with crude and iron ore, ferroniobium for aerospace steel, pulp, coffee and proteins, while the US ships back aircraft, energy, chemicals and heavy machinery.

(source: Atlantic Council)

But, Argentina now offers Washington something Brazil increasingly isn’t: predictable alignment on key issues like political views where Lula leans hard left, Milei is a libertarian who believes in free markets. 

Plus, Argentina has what the US wants: the Vaca Muerta gas fields (potentially rivalling Texas in scale), lithium mines that fit into 'friend-shoring' (moving supply chains away from China to friendly countries), and a government willing to embrace free-market reforms.

While Lula declared Brazil can survive without US trade, Milei said he'd leave Mercosur (Latin America's trade bloc) to secure a deal with Trump.

The economics: tricky but navigable

The IMF and World Bank both project 5.5% growth for Argentina in 2025. That's a complete reversal for a country that was shrinking two years ago. Export engines are just starting to fire.

But here's the catch: inflation is still projected at 41.3% for 2025. Imagine your salary staying flat whilst prices rise 41% in a year. This is Milei's balancing act: slash government spending, whilst keeping essentials affordable.

(source: GlobalX)

Think of it like losing weight whilst training for a marathon. You need to cut calories (government spending) without fainting mid-race (social collapse). Uncomfortable, but doable if you get the sequence right.

What Argentina needs to get right:

Vaca Muerta exports scale

The gas field already supplies 60% of Argentina's oil output. US giant Chevron is ramping to 30,000 barrels daily by year-end. YPF (Argentina's state oil company) and Italy's Eni are building export terminals for liquified natural gas. 

Once pipelines and terminals come online between 2026-2030, energy exports alone could swing Argentina's trade balance by $3-5 billion annually.

Agriculture finds new buyers

Argentina's agricultural exports are surging across the board. Soybeans lead the charge: exports to China will hit a record 7.2 million tonnes this season, up from 0.6 million tonnes a year earlier. It goes beyond soybeans, as corn exports are up 40% YoY, wheat shipments are up too.

The agricultural complex (soybeans, corn, wheat, beef) could add $11-18 billion in export revenues if weather cooperates and new trade relationships stick.

Tourism reversal & tech exports

In Q1 2025, Argentines spent $4.92 billion abroad whilst foreigners spent only $1.45 billion in Argentina. The overvalued peso made Argentina expensive for visitors. Once the currency stabilises, inbound tourism surges.

Meanwhile, knowledge economy exports (software, digital services) hit $2.3 billion in Q1 2025, up nearly 30%. 

MercadoLibre (Latin America's Amazon), based in Buenos Aires, dominates Latin America's e-commerce landscape with over 20% market share. Combined upward potential: $3-6 billion as the peso finds its footing.

Lithium unlocks future value

Rio Tinto's $2.5 billion Rincon lithium project was the first approved under Argentina's new investment regime. Even with oversupplied markets today, expansions could add $2-3 billion in exports over 24 months with revenue multiples expanding as lithium prices recover.

The currency problem nobody wants to talk about

Here's Argentina's central challenge, explained simply: the country is stuck between two bad options:

Option 1: Keep the peso pegged (fixed to the dollar at an artificial rate). This bleeds foreign currency reserves because the government has to keep selling dollars to maintain the rate. Think of it like trying to hold a beach ball underwater - it takes constant effort and eventually you run out of strength.




Option 2: Let the peso float freely. This could trigger wild swings in the currency before people trust the system. Imagine if your salary could suddenly be worth 30% less next month because the currency moved.

The IMF keeps pushing Argentina toward a 'managed float': let the currency move within bands, with transparent rules about when the central bank intervenes.

The US backing matters precisely here. Washington's explicit support (including those direct peso purchases) signals to investors that Argentina won't face a sudden financial crisis. But make no mistake: this is a bridge to buy time, not a permanent safety net.

10x growth is not complicated

The title promised you a 10x opportunity. Let's show you the maths. Getting to a 10-bagger over the next decade requires three things to align: currency appreciation, corporate earnings growth, and multiple expansion.

Argentina's Merval currently trades at a price-to-earnings ratio of 7x. Think of this as paying $15 for every $1 of annual profit a company makes. The S&P 500 currently sits at 28-30x.

Breaking down the 10x thesis

~ 2x from currency appreciation

The peso today trades around 1,400 per dollar today, with analysts projecting it holds this level through end-2025. If Argentina rebuilds its reserves and credibility over the decade, a gradual strengthening to 700-800 per dollar delivers a 2x gain for dollar-based investors.

~ 3x from profit growth

The OECD projects GDP growth of 5.2% in 2025 and 4.3% in 2026. Despite this rate of growth, corporate earnings typically grow faster than GDP during recovery phases. Operating leverage kicks in: when factories are already built, each additional sale drops straight to profit.

Once the export infrastructure comes online (2026-2030), incremental revenues from gas, agriculture, lithium flow through at high margins. A sustainable 11-12% annual earnings growth over 10 years compounds to 3x.

~ 2x from multiple expansion

As Argentina transitions from serial defaulter to stable emerging market, its price-to-earnings ratio should converge towards emerging market norms. Moving from 7x to 15-20x delivers another 2-3x.

Poland, South Korea and Chile all saw similar multiple expansion during their emergence phases.

The discount is so wide that even partial success yields strong returns. The 5.5% GDP growth isn't heroic by emerging market standards. It just needs to stick.

What could go wrong (and what to watch)

(source: Courrier International)

The five risks that matter

Economic stabilisations typically fail in two ways: countries run out of money, or they run out of political support. The US credit line reduces the first risk. Milei's election win reduces the second. But neither is eliminated yet.

1. Execution risk

Every subsidy cut, every labour reform, every tariff change burns your limited political capital. Move too fast and you break social cohesion. Move too slow and you lose credibility with markets. It's a grinding, iterative process.

2. Currency discipline risk

If Argentina uses that $40 billion backstop to delay tough currency decisions rather than smooth the transition, it wastes the window of opportunity at hand.

(source: Brad Setser, CFR)

The IMF has been clear: you cannot rebuild reserves without a credible, flexible exchange rate system.

3. Infrastructure bottleneck risk

Vaca Muerta's geology is world-class, but building export infrastructure earns you dollars: pipelines, LNG terminals, compression stations, port upgrades, etc. 



These are multi-year, capital-intensive projects. If they don't materialise, gas stays stranded underground and the crucial dollars will stay where it is.

4. Social fatigue risk

Austerity has real costs. Real wages remain under pressure, and inflation, while slowing, is still 41.3% projected for 2025.

The midterms bought Milei some time, but he must show that belt-tightening is producing tangible improvements (jobs, infrastructure, export revenues) before public support erodes. 

The grace window extends to 2027-2030, not forever.

5. Institutional fragility risk

Reforms must become embedded in rules and institutions, not just personalities. Rating agencies have responded positively to inflation heading down, but this is fragile. Milei must maintain institutional trust long term.

(Data aggregated from TheGlobalEconomy.com, Red shaded areas indicate sovereign default periods)

Companies to watch

(our selection of top 20 companies poised to gain from Argentina’s changing economy)

YPF (NYSE: YPF) - Shale-to-LNG national champion

Direct lever on Vaca Muerta volumes with LNG optionality. Highest Argentina exposure, high dollar-earning capacity, and strong policy leverage from fuel price and export-framework normalisation.

Vista Energy (NYSE: VIST) - High-velocity shale compounder

Pure-play shale operator with among the best drilling results and capital efficiency in the basin. High USD revenue share and a multi-year growth runway as midstream and takeaway expand.

Pampa Energía (NYSE: PAM) - Power and midstream normalisation play

Integrated power and gas with midstream exposure and tariff normalisation sensitivity. Benefits from capacity payments, generation dispatch, and its links to gas transport.

Smaller companies to invest in

To dig further into smaller companies bound to benefit from Argentina’s export-led recovery, create your own StockScreener like we did:

Bonus: ETFScreener

To find out more about ETFs available to index Argentina’s export-led recovery, make your own ETF Screener like we did:

Our take: it’s now or never 

Tl;dr the window is open, but it won't stay open forever.

Argentina has been given time and political space. The market's 250% rally over two years reflects both extreme prior undervaluation and genuine progress. Future gains will be earned through consistent execution.

The playbook isn't complicated: 

  • Pick a currency regime and stick to it. 
  • Sequence reforms so early pain delivers early wins. 
  • Use the US credit line to buy time, not replace policy. 
  • Turn energy infrastructure from PowerPoint slides into steel and concrete. 
  • Let dollar-earning sectors lead because they can show progress without betting on a consumer spending miracle.

If Milei sustains discipline and navigates the currency transition without lurching, Argentina can move from a serial defaulter status to an emerging market comeback story. Credibility compounds into capital. Capital brings long-term recovery. The math works if the politics hold.

Merval trades at roughly a quarter the valuation of US markets despite faster growth since Milei took office. If Argentina locks in reforms and converts resources into exports, there's substantial room for steady upward momentum over the next 5-10 years.

In my opinion, this has the potential to become a 25 year recovery story if everything goes right.

Being early feels lonely at first, but it's what makes the most money.

Stay invested, cautiously.

https://www.marketscreener.com/news/the-next-10x-trade-forget-ai-it-s-argentina-ce7d5fdadc88f726