Amazon.com, Inc. (AMZN.US) has risen 34% year-to-date, surpassing. Latin American e-commerce platform MercadoLibre (MELI.US) has received recommendations from 90% of analysts.

Investors are looking for technology opportunities beyond the seven tech giants in the US stock market, and one of the largest e-commerce companies in the world, Latin American e-commerce platform MercadoLibre (MELI.US), has caught the attention of Wall Street. The stock has risen by 34% so far this year, outperforming Amazon.com, Inc. (AMZN.US) at 27% and the S&P 500 index at 20% during the same period, with a strong performance. According to FactSet data, about 90% of Wall Street analysts rate the stock as "buy," with an average target price of $2,268, representing an 8% increase from the current trading price. There are currently no sell ratings. MercadoLibre ("Free Market") is an Argentine e-commerce and payment platform registered in Delaware, trading on the Nasdaq market. The company was founded by CEO Marcos Galperin 25 years ago during the peak of the internet bubble. Data from eMarketer shows that the company currently dominates online sales in Brazil, Argentina, Mexico, and Chile, accounting for about half of online sales in South America. It also operates a digital payment platform called Mercado Pago. MercadoLibre has recently attracted favor from Wall Street analysts. Brad Gerstner of Altimeter Capital emphasized that the expansion of profit margins and the potential of artificial intelligence are reasons he is "excited" about the stock. At a recent Goldman Sachs Group, Inc. communication conference this month, Gerstner said, "Look at a company like 'MercadoLibre'... as people shift towards the 'big seven' in the US, many companies have been forgotten. I think there will be many internet companies that benefit from artificial intelligence. This is not just an expansion of profit margins but a re-acceleration at the top level, where they can acquire customers, improve products in a way that makes it easier for customers to purchase, and eliminate friction in the system." From Silicon Valley to Buenos Aires Company CEO Gaplerin conceptualized MercadoLibre while studying at Stanford Business School, at a time when most investors would choose to invest internally in California during his search for seed funding. Gaplerin mentioned Wall Street on the West Coast saying, "There is no venture capital in Latin America. In fact, there is almost no venture capital outside Silicon Valley. Even if you are an entrepreneur in New York, investors are all on Sand Hill Road. I don't think they really care about exploring other parts of the world." Investor attitudes have changed. PitchBook data shows that last year, venture-backed Latin American companies raised $3.3 billion in nearly 1,000 transactions. At the peak in 2021, companies in the region generated $16.3 billion in revenue. However, in the late 1990s, Gaplerin had already described the opportunities for a private equity investor who happened to be teaching at Stanford University, noting the lack of infrastructure and competition in Latin America. He said, "There was no ready-made infrastructure in Latin America, no online payments, no efficient logistics for point-to-point commerce, and we had to build it ourselves." "This made things more difficult in the beginning, but it's great for us today." Although MercadoLibre is sometimes referred to as the "Amazon.com, Inc. of South America," when Gaplerin founded the company, eBay was dominating online commerce, and Amazon.com, Inc. was more of an online bookstore at the time. In fact, MercadoLibre chose to collaborate with eBay, with the latter acquiring a 20% stake in MercadoLibre in 2001 and selling it in 2016. Gaplerin said, "We learned a lot from this relationship, and eventually we started to move away from auctions, and today, I think we are closer to Amazon.com, Inc." Amazon.com, Inc. has also begun to sniff out opportunities in South America, as the leading North American e-commerce platform has expanded into Mexico. Gaplerin said, "We have been competing from the beginning, and this competition will continue for many years." Competitive tailwinds Gaplerin pointed out factors that could help MercadoLibre withstand competition. Latin America has a population of over 600 million young people familiar with mobile devices, and e-commerce and online payment services are steadily growing. MercadoLibre's revenue grew by 42% in the second quarter, and by 112% on a neutral exchange rate basis, with operating profit margins expanding to 14.3%. In an interview, Gaplerin said, "The e-commerce penetration rate in Latin America is still relatively low compared to the US, Europe, or Asia." "About half of the population either does not have a bank account or does not have enough bank accounts. For us, this is a huge opportunity, as we can distribute financial products to all these previously excluded people."