The Market Is Down -- Here's Which Stock Between Amazon and MercadoLibre to Buy First
Why it matters: Investors must weigh Amazon's proven stability against MercadoLibre's higher growth potential in a down market.
- Amazon (AMZN) is down 16% from its highs, balancing a vast e-commerce business with the world's largest cloud computing operation, AWS, which is fueled by AI demand.
- MercadoLibre (MELI) is trading 34% below its peak, leveraging its Mercado Pago fintech and Mercado Envios logistics to address Latin America's unique market challenges.
- Amazon's net sales rose 12% year over year in 2025, with net income surging 31%, and it trades at an unusually low 30 P/E ratio, despite pledging $200 billion in capital expenditures.
- MercadoLibre's 44% yearly revenue growth in 2025 translated into less than 5% profit increase due to e-commerce competition and a spike in provisions for doubtful accounts, making its 44 P/E ratio seem high.
- MercadoLibre's smaller $87 billion market cap, compared to Amazon's $2.3 trillion, suggests greater percentage growth potential, with its P/E ratio potentially reasonable for a fast-growing conglomerate.
Investors weighing Amazon (AMZN) and MercadoLibre (MELI) in a down market face a choice between Amazon's established global dominance and MercadoLibre's high-growth potential in Latin America. While Amazon's cloud computing strength and recession-resistant e-commerce offer stability despite massive capital expenditures, MercadoLibre's rapid revenue growth is tempered by squeezed margins and rising doubtful accounts in its fintech arm.
