Amazon (AMZN 1.47%) and MercadoLibre (MELI 5.20%) rose to prominence by pioneering e-commerce in their respective regions. Those enterprises also spawned businesses in logistics and other industries: cloud computing in Amazon's case, and a fintech business under MercadoLibre's umbrella.
Unfortunately, those non-e-commerce enterprises have brought difficulties to both companies, leading to slower stock price growth over the last year. Amid such challenges, is Amazon or MercadoLibre the better buy for investors right now?
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Business challenges
In Amazon's case, its cloud computing arm AWS has become Amazon's main profit source. It drives the majority of the company's operating income despite making up just 18% of the company's revenue in 2025.
AWS has also helped spawn Amazon's artificial intelligence (AI). Unfortunately, the cost of competing in AI appears to have spooked Amazon stock investors. In its Q4 earnings report, the company announced that it would allocate $200 billion to capital expenditures (capex) this year after spending $132 billion in 2025.
MercadoLibre faces a different issue with its fintech business. Thanks in part to Latin America's transition from a cash-based to a fintech-oriented society, the company's fintech arm, Mercado Pago, has become a key growth driver for the company.
However, it now faces issues with non-performing loans. In the first nine months of 2025, the provision for doubtful accounts surged 58% to more than $2.1 billion, dramatically slowing MercadoLibre's profit growth.
NASDAQ: AMZN
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Company growth paths
Fortunately, both companies can probably weather their challenges.
In 2025, Amazon generated $11 billion in free cash flow (a figure that excludes capex spending). With its $123 billion in liquidity, it can probably afford to invest in itself. In MercadoLibre's case, it has turned to AI to analyze individual borrower behavior and economic conditions to set credit limits.
Such conditions touch on the risks of investing in MercadoLibre stock and Latin America in general. MercadoLibre is adept at turning regional challenges into business opportunities (it founded Mercado Pago so cash customers could buy online). Nonetheless, the region faces economic and political crises periodically, which make investing in the region more difficult.
In contrast, the difficulties of investing in Amazon may ironically be a by-product of its successes. Its growth has taken its market cap to about $2.25 trillion. In comparison, MercadoLibre's market cap is around $100 billion. Smaller companies can typically grow at higher percentage rates more easily, and both companies' financials confirm that advantage.
In 2025, Amazon grew its net sales by 12%. MercadoLibre's Q4 results were not available as of the time of this writing, but in the first nine months of 2025, MercadoLibre's revenue surged 37%, far surpassing Amazon in this metric.
NASDAQ: MELI
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Amazon or MercadoLibre?
Ultimately, when picking between the two stocks, the choice probably comes down to risk tolerance.
If one is risk-averse, Amazon's liquidity and potential as a hidden AI winner probably make it a more suitable choice. Although its capex spending is massive, Amazon can likely afford to make such investments.
In contrast, for investors who can handle higher risks, they should probably choose MercadoLibre. Its smaller size allows for faster growth, and even though it faces bad loan and economic risks, MercadoLibre is adept at overcoming such challenges, making it a likely market beater for its shareholders.
