The Market Is Down -- Here's Which Stock Between Amazon and MercadoLibre to Buy First
Key Points
Amazon leads the way in e-commerce and cloud computing, but massive artificial intelligence (AI) and cloud-related investments may have worried some investors.
MercadoLibre is adept at turning challenges into business opportunities, but rising expenses dampened profit growth last year.
- These 10 stocks could mint the next wave of millionaires ›
Investors deciding between buying Amazon (NASDAQ: AMZN) and MercadoLibre (NASDAQ: MELI) face a challenge in deciding between similar stocks.
Both made their name by pioneering e-commerce in their respective regions before finding success with other businesses. Amazon led the way in cloud computing, while MercadoLibre's fintech arm has helped change how consumers spend money in Latin America.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Knowing those things, the question now is which top e-commerce company is a better buy in a down market. Let's take a closer look.
Image source: The Motley Fool.
Amazon vs. MercadoLibre
Indeed, both stocks are down from their highs, with Amazon off 16% and MercadoLibre trading 34% below its peak.
For now, both its size and proven business model may give Amazon an edge. It balances a sizable e-commerce business with the world's first and largest cloud computing operation. Since the e-commerce operation sells just about anything, it holds some degree of recession resistance. Also, cloud migrations and the massive demand for artificial intelligence (AI) continue to fuel AWS's growth.
However, Amazon pledged $200 billion on capital expenditures (capex) this year, up from $131 billion in 2025. Even though Amazon holds $123 billion in liquidity, that spending could hurt Amazon if AI growth suddenly slowed.
Fortunately, that spending has not hurt its growth. In 2025, net sales rose by 12% year over year, while net income surged by 31%. When factoring in Amazon's unusually low 30 P/E ratio, it could draw in investors.
In contrast, MercadoLibre has succeeded by turning Latin America's challenges into successful business enterprises. It created Mercado Pago so its cash-dependent customers could buy online. Now, that enterprise is the region's leading fintech company. It was a similar story with Mercado Envios, when it turned a lack of options to quickly ship goods into a successful shipping and fulfillment operation.
Unfortunately, rising e-commerce competition from Amazon and others has squeezed margins in that part of the business. Also, Mercado Pago's aggressive growth in the fintech market led to a huge spike in the provision for doubtful accounts, which covers loans lenders did not pay back.
Consequently, the company's 44% yearly revenue growth in 2025 translated into a profit increase of less than 5% for the same period. That lower earnings growth may also make its 44 P/E ratio seem high.
Nonetheless, its $87 billion market cap is a small fraction of Amazon's market cap of $2.3 trillion. Considering that Amazon routinely sold at a higher P/E ratio in its earlier years, one could argue that MercadoLibre now sells at a reasonable valuation.
Which stock should investors buy?
When comparing the two stocks, MercadoLibre appears to hold more growth potential in percentage terms. Its smaller size allows it to grow its revenue more quickly, and the P/E ratio is arguably low for a fast-growing e-commerce conglomerate.
However, Latin America is a riskier region, and Amazon posts solid growth numbers considering its size. Thus, it remains a likely market beater, which arguably makes Amazon a more suitable choice for risk-averse investors.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $460,126!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $48,732!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $532,066!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.
See the 3 stocks »
*Stock Advisor returns as of April 5, 2026.
Will Healy has positions in MercadoLibre. The Motley Fool has positions in and recommends Amazon and MercadoLibre. The Motley Fool has a disclosure policy.
Recommended Articles
