Investors deciding between buying Amazon (AMZN 0.41%) and MercadoLibre (MELI 0.20%) 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.
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.
Today’s Change
(-0.41%) $-0.87
Current Price
$209.70
Key Data Points
Market Cap
$2.3T
Day’s Range
$204.93 – $212.22
52wk Range
$161.38 – $258.60
Volume
1.3M
Avg Vol
51M
Gross Margin
50.29%
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.
Today’s Change
(-0.20%) $-3.45
Current Price
$1715.52
Key Data Points
Market Cap
$87B
Day’s Range
$1684.09 – $1737.99
52wk Range
$1593.21 – $2645.22
Volume
291K
Avg Vol
593K
Gross Margin
44.50%
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.
