Best Stock to Buy Right Now: Amazon vs. MercadoLibre

Key Points

• MercadoLibre is less than 5% of Amazon's size as measured by market cap.

• Amazon has driven faster profit growth so far this year despite its much larger size.

• MercadoLibre far outpaced Amazon's revenue growth, but does that justify its higher earnings multiple?

• 10 stocks we like better than MercadoLibre ›

Understandably, Amazon (NASDAQ: AMZN) and MercadoLibre (NASDAQ: MELI) are often compared to one another. Both companies pioneered e-commerce in different parts of the world and then went on to spearhead new industries. Those businesses were distinct but also natural outgrowths of their e-commerce operations.

Admittedly, since it has traded for 10 years longer, Amazon has delivered higher total returns than MercadoLibre. However, MercadoLibre has had the edge in the time that both stocks have traded. Thus, investors comparing the two may wonder whether Amazon or MercadoLibre is the best stock to buy right now.

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The case for Amazon

Amazon's nearly $2.5 trillion market cap might lead investors to question whether its days of rapid growth are over. Amid such a massive size, higher-percentage growth becomes a more difficult feat mathematically.

Nonetheless, part of Amazon's genius has involved circumventing this problem by serving as an umbrella for several smaller but faster-growing businesses. Its online stores business remains its largest revenue source, though the low margins make it unclear whether that is a profitable enterprise to this day.

Instead, it derives the majority of its operating income from cloud computing enterprise Amazon Web Services (AWS). On the e-commerce side, the faster growth comes from asset-light businesses such as digital advertising, third-party seller services, and subscriptions.

Those enterprises have also benefited from Amazon's move into artificial intelligence (AI). AI runs many of AWS' workloads. It also helps enable supply chain efficiencies, product placement, and customer service on the e-commerce side of the business. Such improvements should bring Amazon more business and are likely helping its financials already.

In the first half of 2025, revenue of $323 billion grew 11% compared to year-ago levels. This may lag growth rates of the past. Still, since it kept cost and expense growth in check, the $35 billion in net income for the period was a 48% increase.

So far this year, the stock is up by about 5%. Nonetheless, in recent years, its valuation has fallen. With its 35 P/E ratio being just above the S&P 500 average of 31, Amazon is becoming an increasingly attractive value.

Why investors might consider MercadoLibre

However, investors may question how Amazon's value proposition compares to MercadoLibre's. At a market cap of $127 billion, the company is approximately 5% of Amazon's size, a level that will likely allow for more long-term growth. Its business model also resembles a second chance at Amazon, albeit with mostly different businesses.

In the past, its home market of Latin America was a predominantly cash-based society, where a large portion of the population did not have a bank account or a credit card. For this reason, it formed Mercado Pago to offer these customers digital payment products.

The enterprise was so successful that it expanded to users not buying on MercadoLibre. It repeated this approach when it formed logistics company Mercado Envios. That business brought same-day and next-day delivery to Latin America, an offering that had not been widely available in that region.

On the back of those enterprises, MercadoLibre generated $13 billion in revenue in the first half of 2025, a 35% rise compared to the same period one year ago.

Still, a rise in the provision for doubtful accounts and MercadoLibre's investments in its operations led to a 38% increase in operating expenses. Also, the company took a more significant hit on foreign currency losses, and income tax expenses rose. Thus, the net income for the first half of the year was $523 million, a decline of almost 2%.

Still, the falling profit did not stop the stock from rising by almost 50% so far this year. Also, considering Amazon's one-time higher valuation, investors should probably not assume that MercadoLibre's 62 P/E ratio will stop its stock from rising.

Amazon or MercadoLibre?

Over time, both stocks should beat the market, though MercadoLibre likely has the edge.

Indeed, Amazon has produced the higher profit growth this year of the two companies. It also trades at a much lower valuation.

However, MercadoLibre grows revenue at a faster clip, and the rapid rise in its expenses looks to be temporary. Moreover, its smaller size means higher-percentage growth will be easier to achieve.

Ultimately, those conditions probably led to MercadoLibre's faster stock price growth. As MercadoLibre continues to build on its synergies and the overall successes of its enterprises, its stock is more likely to rise at a faster pace.

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