If I Could Invest $1,000 Into Just 1 Stock in July, It Would Be MercadoLibre By a Mile

Growth-focused investors may struggle to find buys in today's market. The Shiller P/E ratio of 41 indicates the overall market is near record highs. Also, even if investors want to buy, they may gravitate to more popular technology stocks or give up on growth and turn to beaten-down dividend payers in the consumer space.

Fortunately, the market offers a choice for rapid growth without paying an outrageous valuation. If you are willing to take on risk, you have $1,000 that isn't needed for monthly bills or to pay down short-term debt, you could find an opportunity in July to invest it in MercadoLibre (NASDAQ: MELI), and here's why.

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The state of MercadoLibre

First, investors might feel skittish about Latin America, a market with periodic economic and political turmoil.

Moreover, e-commerce competition has squeezed margins on the retail side of the business as MercadoLibre has attracted competition from Amazon, Sea Limited, and numerous smaller competitors. Furthermore, a significant increase in loan volumes has forced the company to absorb higher doubtful-account expenses, which rose 106% year over year in the first quarter of 2026.

And both of these factors reduced its profits in the first quarter of 2026, even as its growth is accelerating amid a 49% yearly revenue increase. These challenges likely led to the stock's 35% decline from its all-time high.

Second, you might wonder why I would invest $1,000 in MercadoLibre when shares trade for around $1,700 at the time of this writing. Fortunately, most brokerages offer partial shares, and while that may incur additional fees or minor hassles, the company's value proposition probably makes that slight inconvenience worth it.

MercadoLibre has thrived by turning adversity into opportunity. When cash-based customers could not buy on MercadoLibre, Mercado Pago was created to offer financial products and, later, a fintech system to serve these customers. Also, when sellers lacked satisfactory logistics options, Mercado Envios was created to fulfill orders and ship products more quickly.

These businesses deepened MercadoLibre's competitive advantage, meaning that accepting lower margins now could mean higher sales and fewer competitors later, ultimately deepening its e-commerce leadership. Regarding fintech, MercadoLibre has responded by using AI more to evaluate potential borrowers. It has also limited loan amounts to reduce potential losses from bad loans.

Lastly, MercadoLibre sells at a price-to-earnings ratio (P/E) of 45. While that is well above the 31 average for the S&P 500, it is also low given that Amazon routinely traded above 50 times earnings in its earlier growth years. When also considering the aforementioned revenue growth, that arguably means its valuation is reasonable.

Buy MercadoLibre

Investors should buy as much of a partial share of MercadoLibre as they can with their $1,000. The company appears risky given its Latin American focus, rising competition, and higher bad-loan expenses.

However, it has repeatedly succeeded at turning adversity into opportunity, and as it addresses its challenges, profit growth could eventually match or exceed the company's huge revenue growth. Thus, if MercadoLibre's history is any indication, overcoming its current challenges should eventually take the consumer discretionary stock to record highs and beyond.

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