13 NASDAQ Stocks with the Highest Upside Potential

10. MercadoLibre Inc. (NASDAQ:MELI)

Average Upside Potential as of April 8: 40.69%

Number of Hedge Fund Holders: 96

MercadoLibre Inc. (NASDAQ:MELI) operates online commerce platforms internationally. It operates the Mercado Libre Marketplace which can be accessed through the mobile app or website. It also offers a fintech solution platform called Mercado Pago and an advertising platform called Mercado Ads among other similar platforms.

In 2024, the company significantly expanded its credit card business and issued 5.9 million new credit cards, which doubled the company’s existing credit portfolio. Such investments temporarily impact profit margins but the long-term profitability of these credit card ventures is secure. The Mercado Pago platform also achieved 60 million monthly active users this year.

The company is now optimizing payment processing times for its POS devices. It’s also used open finance to refine credit scoring and increase credit limits for merchants. MercadoLibre Inc. (NASDAQ:MELI) aims to capitalize on the opportunities presented by the underserved financial markets in Latin America. Furthermore, the company’s advertising revenue grew 37% year-over-year in 2024.

Infuse Asset Management is optimistic about the company despite potential future competition and stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its Q4 2024 investor letter:

“Staying in Latin America, MercadoLibre, Inc. (NASDAQ:MELI) continues to spin its commerce/payments flywheel. While it started out as an e-commerce platform, its fintech business is now much larger. When management pulled back on giving out loans for fear of a worsening economy, overall revenue growth picked up with accelerating GMV in the core e-commerce business. Then, the finance business segment started to reaccelerate when the team realized nonperforming loan ratios were lowered than expected. But the segments aren’t fully independent. There is a beautiful synergy as on-platform payments lower the friction for the commerce business and faster delivery times lead to more orders and therefore more payments. Meanwhile, MELI also offers a plethora of tools for merchants in both commerce and finance. The company is still growing more than 30% and it has a leading brand in Latin America. Someday Nu and MercadoLibre will bump up against each other but I think we still have at least 5 years before they start competing head-on. For less than 30x forward earnings, the valuation is still reasonable for the company.”