MercadoLibre (MELI +1.19%) is a hot tech stock you may not have heard of if you don't live in Latin America. It's the largest e-commerce company in the region, but it's still much smaller than retail giants Amazon, Walmart, and Costco Wholesale.
However, it's growing much faster than all of these stocks, and it could join them as a $50 billion revenue stock by next year. Here's how.
Latin America's answer to Amazon
MercadoLibre's main business is e-commerce, which accounts for slightly more than half of total revenue. In that way, it's a different model from the other retailers, which are more of a pure-play retail model. Even Amazon, which has a cloud business, Amazon Web Services (AWS), an advertising business, and several other segments, relies on e-commerce for more than 60% of its total revenue. When you include the ad business as part of e-commerce, as MercadoLibre does, it's more than 70%
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The fintech business, though, isn't completely separate; it was created to support payments on the MercadoLibre marketplace, and it's a component of the ecosystem. People who engage with the fintech platform are also more highly engaged with the e-commerce platform, and they're both growing rapidly.
In the 2026 first quarter, total revenue increased 49% year over year, with a 42% increase in gross merchandise volume (GMV) and a 41% increase in total payment volume.
The underpenetrated opportunity
If MercadoLibre can continue to report similar growth over the next few quarters, it should easily reach $50 billion in trailing-12-month revenue by next year. Right now, it has $31.8 billion, and if it grows at a compound annual growth rate (CAGR) of 45%, it should surpass $50 billion before the end of 2027.
There are many reasons to believe that it can hit this goal and keep growing. Latin America is underpenetrated in both e-commerce and financial technology, but it's shifting as MercadoLibre improves its value proposition. One of the most consequential decisions it has made was to lower the free shipping threshold in Brazil last year, and that continues to deliver results. Unique active buyers are accelerating in the country, with a 32% increase year over year in the first quarter, as are GMV and items sold, which were up 38% and 56% respectively.
NASDAQ: MELI
Key Data Points
Joining the ranks of similar large e-commerce and retail giants might take time; Amazon and Walmart are the two largest companies in the world by sales, and Costco, the smallest of the three, has $294 billion in trailing-12-month sales. For MercadoLibre to reach that, it would need to grow at a CAGR of 25% for the next 10 years. That's a real possibility, although Costco would also be much bigger at that point.
MercardoLibre stock trades at a P/E ratio of 49, near a 10-year low it reached earlier this year, and this could be a great opportunity to buy on the dip.
