Should You Forget Amazon? Why You Might Want to Buy This Unstoppable Growth Stock Instead

Key Points

• In many respects, MercadoLibre is repeating Amazon's success in a different part of the world.

• MercadoLibre is less than 5% of Amazon's size, pointing to higher remaining growth potential.

• 10 stocks we like better than MercadoLibre ›

Amazon (NASDAQ: AMZN) is one of the most successful stocks in history. Since its May 1997 IPO, it has risen by 235,000%.

That growth has also taken its market cap to approximately $2.45 trillion. Although its days of growth are probably not over, Amazon is unlikely to maintain its current pace when considering its massive size.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Admittedly, it's rare to earn 235,000% returns from any stock. Nonetheless, buying a similar stock with a much smaller market cap could set up investors for considerable gains over time. And one stock that has mimicked Amazon in Latin America could outperform Amazon going forward.

Image source: Getty Images.

The unstoppable growth stock that is likely to outperform Amazon

Instead of Amazon, investors may want to look to its competitor south of the border, MercadoLibre (NASDAQ: MELI).

Despite its successes, MercadoLibre's market cap is around $121 billion, less than 5% of Amazon's size. Even though the two companies are unlikely to peak at the same size, large companies need more absolute growth to maintain higher percentage increases. That differential indicates MercadoLibre holds more remaining growth potential than Amazon.

MercadoLibre can serve as a second chance at Amazon in many respects. Like Amazon, MercadoLibre is the e-commerce leader in its home region. It also mimicked Amazon by finding greater success in a different business. Instead of leading the way in the cloud, MercadoLibre's fintech arm, Mercado Pago, has changed the face of finance in Latin America.

Mercado Pago began by providing financial products to cash-based customers that would allow them to purchase online, even if they did not hold a bank account or credit card. The enterprise was so successful that it began serving customers who did not buy on MercadoLibre, and with that, it became one of the leading fintech enterprises in Latin America.

Like Amazon, MercadoLibre also invested in logistics. The company formed Mercado Envios, which provides shipping and fulfillment services to sellers on the MercadoLibre site. Business conditions allowed Mercado Envios to offer same-day or next-day shipping to customers, something that was previously not widely available in Latin America.

And MercadoLibre leverages its site to sell advertising. The company has provided only limited details about this business, but given its low base, it achieved a 38% year-over-year revenue growth in the second quarter of 2025. Notably, display and video revenue almost doubled, suggesting it will likely become a significant revenue source over time.

MercadoLibre by the numbers

Advertising and MercadoLibre's other businesses bolstered its revenue, which came to $12.7 billion in the first half of 2025, a 35% yearly increase. That also included a 19% rise in gross merchandise volume and a 41% surge in total payment volume, both pointing to the continuing growth of its e-commerce and fintech businesses.

Still, fintech may also present the company with a significant challenge. In the first two quarters of 2025, net income of $1 billion rose by 16% yearly, significantly lagging the revenue growth rate. This is mainly because the provision for doubtful accounts surged 57% higher, indicating that it may have expanded its credit portfolio too aggressively.

Amid that challenge, MercadoLibre outperformed the S&P 500 over the last year, but not by a wide margin. That may lead to questions on how forgiving investors will be over its relatively high P/E ratio of 57.

Still, with rapid revenue growth continuing, investors may give MercadoLibre more time to address the concerning increase in the provision for doubtful accounts. Assuming income growth rises more in line with the revenue increases, it should bode well for MercadoLibre stock over time.

Consider MercadoLibre stock

Going forward, MercadoLibre stock is likely to outperform Amazon.

Although Amazon should remain a solid investment, its large size may reduce its growth percentages. This places MercadoLibre's smaller market cap in a more favorable light.

Moreover, Amazon has already forged the growth path of its e-commerce, logistics, and ad businesses, indicating MercadoLibre can achieve considerable growth by following Amazon's lead. With regards to both fintech and logistics, MercadoLibre became an industry leader by meeting previously unmet needs in Latin America, further bolstering the company's growth.

It's unclear whether MercadoLibre will grow to Amazon's size -- but the difference in market caps and success in Latin America makes it likely MercadoLibre will outperform its counterpart north of the border.

Should you invest $1,000 in MercadoLibre right now?

Before you buy stock in MercadoLibre, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and MercadoLibre wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $668,155!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,106,071!*

Now, it’s worth noting Stock Advisor’s total average return is 1,070% — a market-crushing outperformance compared to 184% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 13, 2025

Will Healy has positions in MercadoLibre. The Motley Fool has positions in and recommends Amazon and MercadoLibre. The Motley Fool has a disclosure policy.