MercadoLibre, Inc. (MELI): A Bull Case Theory

We came across a bullish thesis on MercadoLibre, Inc. on Business Ontology’s Substack by Lorenzo Bastianelli. In this article, we will summarize the bulls’ thesis on MELI. MercadoLibre, Inc.'s share was trading at $2,472.91 as of August 29^th MELI’s trailing and forward P/E were 61.07     and 47.62 respectively according to Yahoo Finance.

Mercado Libre reported another strong quarter, with net revenues and financial income rising 34% year-over-year to $6.8 billion (53% FX-neutral) and gross merchandise volume up 21% to $15.3 billion (37% FX-neutral), reinforcing its leadership in Latin American e-commerce while accelerating growth in fintech. The company continues to prioritize market penetration over near-term margins, lowering Brazil’s free shipping threshold and reducing seller shipping charges to stimulate volume growth and expand assortment. While this compresses commerce margins, MELI’s superior logistics network—the fastest in the region—provides the foundation for long-term dominance. The strategy is already yielding results, with items sold in Brazil accelerating to 34% growth in June.

This commerce push directly fuels high-margin areas such as fintech and advertising. Advertising revenues grew 38% year-over-year (59% FX-neutral), supported by Google Ad Manager integration, advanced targeting, and AI-driven optimization for sellers. Fintech remains the standout, with the credit portfolio up 91% to $9.3 billion, assets under management more than doubling, and monthly active users climbing 31% to 68 million. Engagement is deepening as users adopt multiple products, supported by yielding accounts and strong credit quality.

This ecosystem-driven model gives MELI an edge over rivals like Nu Holdings, with higher monetization per user and faster growth in both revenues and ARPAC. Infrastructure investments continue to scale, with property, plant, and equipment surpassing $3.5 billion in 2025 and new facilities expanding the logistics moat. With Ariel Szarfsztejn set to take over as CEO in 2026, ensuring strategic continuity, MELI’s execution highlights its compounding ecosystem advantage and long-term upside in Latin America’s digital transformation.

Previously we covered a bullish thesis on MercadoLibre, Inc. (MELI) by Daan | InvestInsights in May 2025, which highlighted its dominance in LatAm e-commerce and fintech, strong Q1 growth, and long-term scalability. The stock has depreciated ~4% since then due to margin pressures. The thesis still stands given secular tailwinds. Lorenzo Bastianelli shares a similar view but emphasizes fintech, advertising, and infrastructure-driven compounding.

MercadoLibre, Inc. is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 108 hedge fund portfolios held MELI at the end of the first quarter which was 96 in the previous quarter. While we acknowledge the potential of MELI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.