With this in mind, here are two growth stocks that I think are worth considering buying for the next five years. While each is different in size, I think both have clear paths to becoming larger companies in future.

$2.25trn giant

Let’s start with Amazon (NASDAQ:AMZN). With a colossal $2.25trn market cap, the company is no spring chicken these days. But despite its relative maturity and massive size, I can’t think of many firms pursuing more growth avenues.

For starters, it has integrated AI across its ecosystem, including agentic AI shopping assistant Rufus, which can shop tens of millions of items (including other online stores) and make purchases on behalf of customers. It helped drive nearly $12bn in incremental annualised sales last year.

Then there’s high-margin digital advertising, the fastest-growing segment, which I believe is underestimated given Amazon’s massive vault of consumer data. Ad revenue surpassed $68bn last year, with 22% growth in Q4.

Another emerging growth market is Amazon Leo, its satellite internet project which aims to compete with Starlink. The list goes on: AI chips, self-driving vehicles (Zoox), healthcare, as well as the core e-commerce and cloud computing operations. 

Amazon expects to invest about $200bn in capital expenditures this year, mainly on data centres to expand cloud capacity for AI demand. And the risk is that the company doesn’t get a good return on this huge capital outlay, especially as it’s now raising debt to fund it.

However, management isn’t doing this with its eyes closed and fingers crossed. On the Q4 earnings call, CEO Andy Jassy said: “Customers really want AWS for core and AI workloads, and we’re monetising capacity as fast as we can install it.”

Today, the stock can be picked up for 29.2 times earnings (a 10-year low).

$85bn Latin American leader

MercadoLibre (NASDAQ:MELI) has essentially taken the Amazon playbook and successfully applied it to Latin America. Already a regional leader in e-commerce, its digital ad revenue surged 67% in the fourth quarter.

The firm also has its own streaming platform (Mercado Play) and subscription service (MELI+). And like Amazon, its vast logistics network allows it to deliver parcels faster than rivals. It recently opened its first fulfilment centre in China, allowing quicker shipping to its five largest markets (Brazil, Mexico, Argentina, Chile, and Colombia).

Revenue jumped 45% to $8.76bn in the fourth quarter, as gross merchandise volume rose 36.8% to $19.9bn. With e-commerce penetration levels roughly half the level of the US, UK, and China, the company has a massive growth opportunity ahead.

But what separates MercadoLibre from Amazon is its fintech unit, Mercado Pago, which offers credit and various financial services. Here, assets under management have grown from $2bn to almost $19bn over the past three years, with monthly active users more than doubling to 78m.

The stock has fallen 35% in less than a year because the company is investing in additional free shipping and fulfilment centres. This is pressurising margins in the near term, adding some risk.

But like Amazon, I think these investments will strengthen MercadoLibre’s competitive position in the long run, allowing it to capture the sizeable growth opportunities ahead.

The post 2 excellent growth stocks to consider for a SIPP for the next 5 years appeared first on The Motley Fool UK.

Right now, shares in some outstanding businesses are trading at unusually low prices. And when that happens, investors should be thinking about piling in. 

Long-term quality

When it comes to investing, I tend to think that the quality of the underlying business is what matters most over the long term. But even the best companies have their ups and downs. 

One thing that can cause this to happen is when a firm invests heavily to boost its competitive position. That causes profit margins to contract and the stock starts to look expensive. 

A lot of the time, though, this is just the company investing in its own growth. And the results show up in the cash flow statement sooner or later. 

In the short term, though, it can cause share price volatility. But this is something investors who think in years or decades – rather than weeks or months – can take advantage of.

Wise

UK-listed Wise (LSE:WISE) is a good example of this. It feels like every time the payment processor reports earnings, its take rate (the amount it charges) is lower than it was before.

Almost every time, the stock market interprets this as a sign of weakness – why would the firm charge less unless it’s facing competitive pressure? In reality, though, it’s the opposite. 

Driving down prices widens the gap between the business and its nearest competitor. And it means that anyone looking to send money has an even stronger reason to use the UK company. 

The risk is that banks start bringing down their own charges for cross-border transactions. But while that threat can’t be eliminated, bringing down its own take rate does help Wise to limit it.

MercadoLibre

MercadoLibre (NASDAQ:MELI) is in a similar situation. In its most recent update, it reported 45% revenue growth and an 11% decline in earnings per share – the stock fell 14% as a result. 

The main reason margins fell is that the e-commerce company made some big investments. It lowered its threshold for next-day delivery and invested heavily in new fulfilment centres.

Those might weigh on short-term profits, but they significantly strengthen the firm’s long-term position. Competitors now have to offer something similar or risk being left behind.

Without MercadoLibre’s scale, that’s extremely hard to do without losing money. And that’s why I think the stock market’s reaction is the wrong one from a long-term perspective.

Be greedy

Most of the time, the stock market knows that Wise and MercadoLibre are outstanding businesses with terrific growth prospects. And it prices them accordingly. 

Right now, though, I think investors are focusing on the risks. In Wise’s case, that’s the possibility of geopolitical tensions making it harder to facilitate transactions across borders. 

With MercadoLibre, there’s a threat of higher oil prices reigniting hyperinflation in Argentina. The situation is just starting to come under control, so that could be a real setback.

A lot of the time, investors ignore these risks – and that’s a mistake. But it’s also a mistake to focus on them too much, which is what I think is going on right now. 

As a result, I think these are two growth stocks that investors should consider buying in March. They’re extremely high-quality businesses trading at unusually low multiples.

The post 2 spectacular growth stocks to consider buying in March appeared first on The Motley Fool UK.

Here, I’ll explain why I’m happy for it to occupy the top spot as we start 2026.

Large opportunity

The stock in question is MercadoLibre (NASDAQ:MELI). This is Latin America’s largest company by market-cap, though it’s listed in the US on the Nasdaq.

So why Latin America? Well, the region has roughly 650m people. This makes it a larger population than the European Union (about 450m) and almost twice the size of the US (340m).

Meanwhile, the nominal GDP of the region is currently estimated at around $7.3trn. To put that in context, if Latin America was a single country, it would be the world’s third largest economy behind the US and China.

MercadoLibre operates the region’s leading e-commerce, FinTech, and digital advertisement businesses across 20 countries. E-commerce in Latin America is still in its infancy, with around 12%-15% of shopping done online versus roughly 30% in the UK. 

Meanwhile, around 70% of Latin America’s population is considered either unbanked or underbanked. As such, financial services there also have an incredibly long runway of growth ahead (likely decades).

The firm’s FinTech platform (Mercado Pago) now has 72m+ users, giving it insights into the spending habits of its customers. This data is a key competitive advantage over rivals.  

Finally, the company’s already the region’s third-largest digital advertising player behind Meta and Google. However, ad revenue as a percentage of the firm’s marketplace gross merchandise value (GMV) is still only about 2% today. Amazon‘s is far higher.

As such, management sees a blue-ocean opportunity to become a much larger advertising platform, which bodes well for the company’s long-term profitability (digital ads have very high margins).

Not an overpriced growth stock

Speaking of which, this is another reason why I’m bullish here. MercadoLibre is now firmly profitable, with earnings per share expected to grow at roughly 40% in both 2026 and 2027.

Based on current forecasts, the forward price-to-earnings (P/E) multiple for 2026 is around 36, falling to 26 by next year.

For a tech company that’s grown revenue above 30% for 27 consecutive quarters (and is still optimising for scale rather than profits), I see this as an attractive valuation. I think other growth-oriented investors could consider buying the stock.

Things I’m watching

That said, it would be naïve not to acknowledge the risks here. So what am I keeping an eye on? Rising e-commerce competition is one thing, especially from Asia’s Shopee, which has parked its tanks on MercadoLibre’s lawn in Brazil (its largest market).

I still think MercadoLibre will maintain its advantage due to its ts deep regional knowledge and sprawling logistics network, which allows much faster parcel deliveries. But it’s certainly something to watch, as it could lead to a margin-bruising price war.

Also, the firm has a ballooning consumer credit portfolio, which now includes credit cards, so I’ll be monitoring non-performing loan figures moving forward.

Finally, I’m visiting Brazil and Mexico later this year. While I’m there, I’ll test the MercadoLibre user experience and do further research.

The post Here’s the number-1 stock in my ISA and SIPP appeared first on The Motley Fool UK.

Right now, my best growth share to consider buying and holding for the next 10 years is MercadoLibre (NASDAQ:MELI). And as the name suggests, you won’t find this sandwiched somewhere between Marks & Spencer and NatWest in the FTSE 100.

So why this particular stock?

A typical day in Buenos Aires…

MercadoLibre, which means ‘free market’ in Spanish and the language spoken in most of the 18 countries the firm operates in across Latin America. The Montevideo, Uruguay-based business runs the region’s leading e-commerce marketplace and fintech platform (digital wallet, payments, insurance, investments, etc).

Its biggest markets are Brazil, Mexico and Argentina, where more people are choosing to send 100% of their salary to its Mercado Pago account. This app pays attractive interest, unlike traditional banks, and now has 72m monthly active users.

Incoming CEO Ariel Szarfsztejn recently described a typical routine of a customer in Buenos Aires. In the morning, they might take the bus or train to work, paying with MercadoLibre’s app. Then use its QR codes to pay for lunch, while possibly surfing its e-commerce site.

On an evening, they may buy groceries through the firm, or pay for them with its app in store. Check their stocks or crypto on Mercado Pago. And then maybe unwind with some entertainment streamed through its Mercado Play app.

In other words, the company’s becoming increasingly interwoven into daily life across Latin America. And that bodes very well for its future earnings potential, with online shopping and financial services taking off across the region.

Continent-sized growth opportunity

In the past 10 years, revenue has leapt from $652m to nearly $21bn last year. That’s a roughly 32 times increase! Naturally that torrid rate of growth can’t continue forever, but Wall Street still expects top-line growth of 37% this year. Then above 20% over the following three years.

But the long-term opportunity remains incredibly large. Last year, MercadoLibre still only had 100m buyers out of a population of 650m people.

Meanwhile, a third pillar is emerging alongside e-commerce and fintech. Namely digital advertising revenue, an opportunity management describes as “huge“. Like Google and Meta, the firm’s sitting on vast amounts of valuable consumer data.

We think that Latin America will get to UK standards or even Asian standards of e-commerce penetration. There’s no reason why that will not happen…The size of our business…is huge today, but it could be even bigger in the coming years. Ariel Szarfsztejn, speaking to Scottish Mortgage Investment Trust.

19% dip

Now, one risk is that MercadoLibre’s facing rising competition from Shopee in Brazil and Amazon elsewhere. To combat this threat, it has cut the free‑shipping threshold while investing heavily in fintech infrastructure.

Consequently, this is putting pressure on margins, which is worrying some (short-term) investors. This is reflected in the share price, which has fallen 19% since hitting a record high back in June.

I think this dip presents an attractive buying opportunity that long-term investors should consider. The stock’s now trading at 25 times forecast earnings for FY2027 — very cheap compared to historical norms.

The post My top growth stock to consider buying and holding until 2035 appeared first on The Motley Fool UK.

Looking ahead to the next 12 months however, I think another growth stock has more potential. Here’s why I see it outperforming Nvidia.

A powerful ecosystem

MercadoLibre (NASDAQ:MELI) may not be well known in Europe, but it certainly is in Latin America, where it operates across 18 countries.

Mexico’s competition watchdog estimates that MercadoLibre and Amazon together command up to 85% of the country’s e-commerce market — a near duopoly. And MercadoLibre has a leading position in other key markets in Latin America.

Like Amazon, MercadoLibre has built vast logistics networks. These allow it to operate the region’s fastest shipping network, with record levels of same-day delivery in Argentina and elsewhere.

I’m sure many readers are familiar with the ‘sponsored’ ads on Amazon (ie the seller’s paying to advertise their product in that slot). Well, MercadoLibre has the same lucrative digital ads, while also operating a Prime-like loyalty programme (Meli+).

Finally, it has one of the region’s most popular fintech apps (Mercado Pago), where users can pay for stuff online and offline, access loans, insurance, make investments, and more.

This seemingly motley collection of businesses — e-commerce marketplace, logistics, loyalty programme, digital payments, credit, and advertising — actually form a tightly woven, reinforcing ecosystem.

Incredible growth

The company’s grown revenue from $2.3bn in 2019 to $20.8bn last year. In this time, it has swung from a $172m loss to a net profit of $1.9bn.

In Q2 of this year, strong growth continued across the business.

Note that the firm’s sacrificing profits in the near term for long-term growth. For example, it’s reduced the cost of shipping for sellers, while lowering the free shipping threshold in key markets like Brazil.

As a long-term shareholder, this is exactly what I want to see. However, Wall Street isn’t often as patient when it comes to such things. So this could become an issue in forthcoming quarters.

Meanwhile, the firm’s growing credit portfolio adds complexity and risk. Economic conditions could worsen in Latin America, increasing the amount of bad loans on its books.

Reasonable valuation

The stock’s up 2,300% over the past decade, making MercadoLibre the largest company in Latin America, with a $121bn market-cap.

For 2025, Wall Street expects revenue to exceed $28bn (+35%), before reaching more than $43bn in 2027. Despite heavy ongoing investments, profits are expected to more than double in this period.

Yet the valuation is far from silly for a high-quality growth company. We’re looking at a forward price-to-earnings ratio of 36, falling to 26 by 2027. This is actually lower than Nvidia, at 39 and 28 times respectively.

Prediction

For the record, I also own Nvidia shares as well as MercadoLibre. However, news that Beijing has ordered all Chinese tech firms to stop buying Nvidia’s AI chips isn’t great. I think this could act as a drag on the stock into 2026, and even erase recent gains.

With Nvidia now looking unlikely to surprise Wall Street with beat-and-raise quarters, I fancy MercadoLibre to outperform it over the next 12 months. As such, I reckon it’s worth checking out.

The post Prediction: I think this top growth stock will smash Nvidia over the next 12 months appeared first on The Motley Fool UK.

Established tech giant

Amazon (NASDAQ:AMZN) is a classic case study in building optionality. It started out as an online book seller, before morphing into the ‘everything store’ by allowing third parties to sell on its platform. 

Today, Amazon is the e-commerce behemoth we all know, as well as a global leader in cloud computing through AWS. Then there’s Prime, Alexa, Twitch, and developing projects like self-driving cars, delivery robots and drones, an internet satellite constellation, and more.  

Amazon is also quickly becoming a digital advertising giant. In Q2, ad revenue hit nearly $16bn, up 23% year on year. This income has far higher margins than retail sales, and should noticeably boost Amazon’s profitability over time. 

However, all these things rolled into one does invite regulatory scrutiny, especially in Europe. So antitrust action could force tighter rules or even a break-up one day. 

Nevertheless, with the stock trading at a fairly reasonable 34 times forward earnings, I think Amazon looks attractive. Especially when the long-term growth opportunities in higher-margin digital advertising and AI cloud computing appear substantial.  

Emerging tech giant

Next is a mini Amazon in the making: MercadoLibre (NASDAQ: MELI). Indeed, it’s often called the ‘Amazon of Latin America’. 

That’s because the company also has a large e-commerce marketplace and extensive logistics network, as well as a fast-growing advertising business and Prime-like subscription service.

But MercadoLibre’s optionality extends to fintech offerings, namely Mercado Pago (digital payments, savings and investment features) and Mercado Crédito (loans to both merchants and unbanked consumers).

These operations spin into each other like a well-oiled flywheel across 18 nations. In Q2, net revenue rose 34% to $6.8bn, with gross merchandise volume growth in all markets. Mexico performed strongly while Argentina returned to growth after years of economic turbulence. 

Of course, it’s important to acknowledge that Latin America isn’t always the safest sandbox to play in. Wild currency swings, hyperinflation, and political instability in core markets can impact profitability. These are unavoidable risks moving forward here. 

However, this is also a region where traditional banks have often treated customers poorly, or left them behind completely. MercadoLibre already has 68m monthly active fintech users. But to fully capitalise on the opportunity, it’s aiming to become a fully licensed digital bank. 

This would allow it to grow the loan book more aggressively and at a potentially lower cost, as well as offer a wider range of financial products. And while this increases the risk of rising bad loans, it also opens up a massive long-term growth opportunity.

In e-commerce, the firm is slashing shipping costs for millions of consumers, which is putting pressure on margins. But over time, this should keep shoppers loyal and deepen the company’s competitive advantages. And like Amazon, digital advertising should help boost profitability.

The stock is trading at 36 times next year’s forecast earnings. Given that the company is still decisively prioritising growth over profits, that’s by no means outrageous.

Overall, MercadoLibre strikes me as a compelling long-term play on the digitisation of Latin America.

The post My top 2 growth stocks to consider for an ISA right now appeared first on The Motley Fool UK.

Barclays

What it does: Barclays offers both traditional private banking services as well as catering for international, institutional corporate clients.

By Andrew Mackie. I bought my first tranche of Barclays (LSE: BARC) in early 2020, during the Covid crash. For a couple of years the stock did absolutely nothing. But then, off the back of rising interest rates, net interest income began to surge and it has become one of the best performers in my portfolio. Patience really can be an investors best friend.

Of course, talk of tariffs and trade wars have reversed the positive momentum. Nevertheless I have remained invested. The main reason is because of the all-important structural hedge. Most private investors believe that a falling interest rate environment would be bad for net interest income. But that is simply not true.

During its FY24 results, it stated that £9.1bn of gross income over the next 2 years is already locked in, regardless of where interest rates go. Of course, should a recession ensue that won’t stop its share price falling, as delinquencies increase. But then again, back in 2023 many expected a recession, which never happened. If I had have sold out then, I would have lost out on the stock’s most explosive moves.

Andrew Mackie owns shares in Barclays.

IG Group

What it does: Financial trading platform IG Group offers trading products such as CFDs, spread betting and options.

By Roland Head. IG Group (LSE: IGG) is one of the largest and oldest holdings in my share portfolio. While the stock suffers periodic ups and downs, high profit margins and a reliable dividend mean I’ve always been happy to continue holding.

One aspect of this business I especially like is that when markets are volatile and uncertain, IG’s clients start trading more. This generates higher revenue (and profits) for the business.

IG is the market leader in CFDs, but one concern for me is that the group’s market share has weakened in recent years as competition has intensified.

However, higher interest rates have provided a big boost to profits and new management are taking steps to update and expand the group’s offering.

IG shares are close to all-time highs at the moment, but recent profit growth means I think the stock remains reasonably priced, on around 10 times forecast earnings. There’s also a useful 4.7% dividend yield.

Roland Head owns shares in IG Group.

MercadoLibre

What it does: MercadoLibre operates a leading e-commerce marketplace across 19 Latin American countries, as well as a digital payments platform.

By Ben McPoland. One stock that I’ve owned for more than five years is MercadoLibre (NASDAQ: MELI). The e-commerce powerhouse has grown its revenue from $2.3bn in 2019 to $20.8bn last year – an increase of 800%!

This has seen the share price rise by more than 200%, making MercadoLibre Latin America’s most valuable publicly listed company in the process.

While the firm now has over 100m e-commerce customers, it is targeting 300m over the long term (from a population of 600m+). But the opportunity in digital payments and banking could be even larger, as the region still has a huge unbanked/underbanked population.

This rapid foray into digital lending does present risks though, especially if key markets like Brazil and Mexico enter a recession. In this situation, the firm could experience rising default rates and credit losses.

Looking ahead though, shopping and payments on smartphones are both expected to continue rising in Latin America. MercadoLibre’s revenue is tipped to reach $38bn in 2027, up from $25bn this year, while earnings per share are forecast to almost double.

I have no plans to sell.

Ben McPoland owns shares of MercadoLibre.

Rightmove 

What it does: Rightmove is an internet business that operates a UK property search portal.

By Edward Sheldon, CFA. I bought Rightmove (LSE: RMV) shares in late 2018. And they’ve been a solid investment for me. 

I originally bought in at a share price of 439p. As I write this, however, the shares are trading for 697p – 59% higher. That translates to a return of about 8% per year. Add in dividends from the company and my return has been closer to 10% per year. 

Looking ahead, I remain optimistic about the stock’s potential. Rightmove is a very well known brand in the UK, so estate agents can’t afford to ignore its platform (meaning the company has pricing power). 

Meanwhile, the stock is attractively priced. Currently, the price-to-earnings (P/E) ratio is in the low 20s, which is not high for a highly-profitable internet company. 

It’s worth pointing out that new competitors are continually popping up. And there’s a chance that these companies could capture market share.

I remain optimistic that Rightmove will keep winning, however. When Britons want to search for a property, rightmove.co.uk is typically the first place they go. 

Edward Sheldon owns shares in Rightmove 

The post 4 stocks Fools bought over 5 years ago and still hold appeared first on The Motley Fool UK.

Thankfully, these laggards have easily been offset by stocks doing very well. Here are three of the standout performers that have been driving wealth in my ISA this year.

Uber

First up is Uber Technologies (NYSE: UBER), whose shares are up a lovely 46% year to date.

The ride-hailing and food delivery giant continues to serve up impressive growth. Trips in Q1 rose 18% year on year to 3bn, supporting a 14% increase in revenue to $11.5bn (+17% on a constant currency basis).

One thing that attracted me to the company is its asset-light model. CFO Prashanth Mahendra-Rajah says Uber has “multiple levers in our control to generate industry-leading cash flow growth.” We are seeing this play out — quarterly free cash flow surged 66% to $2.3bn.

Arguably the biggest risk here remains Tesla‘s plans for a large-scale robotaxi network. While Uber’s partnering with dozens of robotaxi firms around the world, Tesla’s indicated it plans to go it alone with its own consumer-facing app. That could one day siphon off users from Uber.

My own view is that it will be years before such a robotaxi network challenges Uber on a global scale. Elon Musk has described Europe as a “layer cake of regulations and bureaucracy“, which suggests artificial intelligernce-powered robotaxis won’t be navigating the busy streets of London and Paris anytime soon.

I think Uber has years of growth left in the tank and I plan to add to my holding on dips.

Duolingo

Next, we have language learning firm Duolingo (NASDAQ: DUOL). I only bought this stock at the start of 2025, so it’s nice to see it up 59% already.

I’ve been banging on about this stock for a while, so I won’t repeat myself. But the company had 49% more daily active users (46.6m) in Q1 than it did last year, and grew revenue 38% to $230.7m.

A recession might impact subscriber growth or global travel (and therefore the desire to learn a language). The stock’s also very pricey.

But longer term, Duolingo is pursuing a massive market (2bn language learners), while using generative AI to drive efficiency gains and create unprecedented amounts of course content.

MercadoLibre

Finally, e-commerce and fintech powerhouse MercadoLibre (NASDAQ: MELI) has been doing the business (again) this year. Shares of Latin America’s largest company — and my second-largest holding — are up an impressive 47% in 2025.

Of the three, I would say MercadoLibre stock looks the most attractive right now. Granted, a price-to-sales ratio of 5.6 and forward price-to-earnings multiple of 51 don’t scream value. And the firm faces competition from Amazon in e-commerce and Revolut and Nu Holdings in fintech.

But MercadoLibre’s profits are forecast to more than double by 2027. And only 15% of retail spend in Latin America is online today. As the other 85% shifts from physical commerce to digital over the next couple of decades, MercadoLibre looks set up for plenty more growth.

Meanwhile, adjacent opportunities in cashless payments, digital banking and e-commerce marketplace advertising appear plentiful. I think MercadoLibre’s worth considering.

The post 3 top growth stocks driving wealth in my Stocks and Shares ISA appeared first on The Motley Fool UK.

However, I instead went with lesser-known MercadoLibre (NASDAQ: MELI). Given that I tend to buy stocks to hold for a minimum of five years, now seems like a good time to reflect on that decision. Was it the right one?

Rationale

Back then, both e-commerce firms were growing strongly (MercadoLibre across Latin America and Amazon globally). But Amazon already had a colossal $1.1trn market cap, making it about 40 times larger than MercadoLibre with its $27bn market value.

Of course, this doesn’t mean anything on its own. Larger firms are often that way because they’re more established and profitable, while smaller enterprises can carry higher risk due to flimsy fundamentals.

Nevertheless, I wanted to invest in a company that wasn’t already massive,as these have (in theory at least) a better chance of making higher returns.

Also, Latin America was still around a decade behind North America and Europe in terms of smartphone/internet penetration. So I figured that if MercadoLibre became a true e-commerce leader in the region — which looked increasingly likely — then it might enjoy the same sort of market-thumping share price growth as Amazon had in previous years.

How did this work out?

Since my investment in early April 2020, MercadoLibre stock has surged 312% against Amazon’s 85%.

The latter has actually underperformed the S&P 500‘s return (around 100% with dividends). I find that surprising, as Amazon’s revenue has more than doubled in that time, surging from $280bn in 2019 to $638bn last year. Earnings per share (EPS) are up nearly 400%!

Meanwhile, MercadoLibre’s revenue has skyrocketed from $2.3bn in 2019 to over $20bn last year! It has also turned profitable, with EPS going from -$3.71 to $37.69.

While MercadoLibre is often called the ‘Amazon of Latin America’, there are some notable differences between them. The US giant has a massive and very profitable cloud computing business (AWS), which MercadoLibre doesn’t.

That said, the Latin American company posseses a PayPal-like fintech business that boasts over 61m monthly active users. Both have sprawling logistics infrastructure, giving them a competitive edge, as well as popular subscription services (Prime and MELI+, respectively).

However, both firms face near-term risks due to the US-China trade war. This has the potential to trigger inflation and an economic downturn, putting pressure on consumer spending.

Which stock would I choose today?

I still own the position I bought in 2020 and have no plans to sell. Indeed, I’ve since bought its shares on two further occasions!

However, looking at the two stocks today, Amazon arguably looks the more attractive. It’s trading at around 28 times forward earnings versus 45 for MercadoLibre.

Of course, the beauty of investing is that it doesn’t have to be either/or. I think both stocks will outperform long term, as each company continues to benefit from unstoppable trends like e-commerce, digital payments, and AI-driven online advertising.

As such, I’m considering Amazon shares while they’re under $200.

The post I bought this growth stock instead of Amazon in April 2020! Was that wise? appeared first on The Motley Fool UK.

However, it ended last Thursday (6 March) at 18,069 points. This meant it had fallen more than 10% since December, officially putting it in correction territory.

Nobody knows where things will head next, but history suggests that buying high-quality Nasdaq stocks on previous dips has been a winning strategy for long-term investors.

Here are two shares I think are worth considering.

MercadoLibre

The first is MercadoLibre (NASDAQ: MELI). This is the Amazon/PayPal of Latin America, operating across 18 countries. As well as running the region’s largest e-commerce marketplace, it has fast-growing fintech and advertising businesses, as well as an Amazon Prime-like subscription service.

In 2024, the company’s revenue soared 38% year on year to $21bn, while net profit almost doubled to $1.9bn. 

The stock isn’t cheap at 5 times sales and 43 times forward earnings. MercadoLibre will have to keep growing quickly to justify its valuation, while also fending off competition from cheap Chinese shopping apps. These are risks to consider.

According to management though, Latin America’s still a decade behind the US in terms of e-commerce penetration. And MercadoLibre aims to grow its annual users from 100m today to 300m over the long run.

These figures highlight the significant opportunity ahead. The share price is down 11.1% since February, offering a potential dip-buying opportunity to research.

Alphabet

Next up is Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). As the ticker symbols indicate, this is the parent company of Google and everything that entails (Google Search, Google Cloud, YouTube, Android, etc).

At $175, the share price is 15.4% lower than it was just a month ago. This puts the tech stock’s forward price-to-earnings (P/E) ratio at a cheap-looking 19 times. That’s way lower other ‘Magnificent Seven’ tech stocks and the wider Nasdaq index.

Why are the shares cheap? I think there are a couple of key concerns here. First, the US Department of Justice is pushing to break up Google. Accusing it of being a monopoly, it wants the tech giant to sell its web browser, Google Chrome and, potentially, Android. So this uncertainty’s hanging over the stock.

Another risk is that the majority of Alphabet’s profits stem from digital advertising on Google and YouTube. There’s rising concern that the US might dip into a recession. If so, this could impact Alphabet’s profits for a couple of quarters.

In my eyes though, the long-term positives outweigh the risks here. Analysts see the company growing revenue to around $480bn in 2027, up from $350bn last year. Earnings are also expected to grow double digits, giving a forward P/E multiple of just 15 for 2027.

Meanwhile, Alphabet’s robotaxi subsidiary, Waymo, carried out more than 4m driverless taxi rides last year. It plans to expand globally over the next decade, potentially disrupting traditional taxi services by replacing human drivers with autonomous vehicles.

Finally, Google’s a leader in the emerging field of quantum computing. Its new quantum chip, Willow, has achieved advances in quantum error correction, completing in under five minutes a computation that would take existing supercomputers 10 septillion years to complete.

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