We recently published a list of 13 High Growth Large Cap Stocks To Invest In. In this article, we are going to take a look at where MercadoLibre, Inc. (NASDAQ:MELI) stands against other best high growth stocks to invest in.
After two years of 25%+ gains, some investors worry that stocks are overvalued. Historically, the third year of a bull market is not usually spectacular, but it is not typically negative either. A lot depends on factors like interest rates and global tensions. According to Morgan Stanley, investor sentiment has maintained a familiar pattern over the years, with pessimism in late 2022, skepticism throughout 2023 even as stocks soared, and now, growing optimism for 2025. The real turning point could be AI. If businesses embrace artificial intelligence the way they did the internet in the late ’90s, it could result in a productivity boom that keeps the market rally going. As for stocks, big tech still reigns supreme, but valuations are much lower than during the dotcom bubble, making them less risky. Still, Morgan Stanley believes a smart strategy for 2025 might be balancing tech investments with financials and industrials to stay diversified.
In 2024, large-cap growth stocks in the United States had another strong year, with the Russell Growth Index climbing 33.4%, mostly powered by a concentrated group of major tech and communication companies, commonly known as the Magnificent Seven. By December, these handful of stocks were responsible for a huge chunk of the gains. Growth stocks kept their winning streak in the fourth quarter, outpacing value stocks by 9.2%, according to a report by LSEG. Over the past decade, they have consistently beat the Russell Value index, averaging 7% higher annual returns.
Investors are on edge as trade policies shake up the market, wiping out $4 trillion from recent highs. Fears of an economic slowdown have triggered a major sell-off, with the broader market dropping 2.7%, its worst day of the year, while the Nasdaq plunged 4% on March 10. Since peaking in February, the wider market has fallen 8.6% as of March 10, inching toward correction territory. Tech stocks, which drove market gains in 2023 and 2024, are also struggling in 2025, pulling major indexes down. Hedge funds are also backing away, cutting stock exposure at the fastest rate in over two years. Optimism around pro-growth policies has receded as uncertainty blooms in the market. Even with recent losses, stock valuations remain near record highs, leaving investors bracing for more volatility ahead.
A customer using their phone to access an online commerce platform.
Our Methodology
For this article, we used the Finviz screener to identify large-cap stocks with market capitalizations ranging from approximately $10 billion to $200 billion as of March 14. We then applied a filter to select stocks with a 5-year revenue growth exceeding 20%, verifying this data through additional sources. Using Insider Monkey’s Q4 2024 hedge fund database, we examined the hedge fund sentiment for each stock and selected 13 most popular ones. The stocks are ranked in ascending order based on the average 5-year revenue growth.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
MercadoLibre, Inc. (NASDAQ:MELI)
Number of Hedge Fund Holders: 96
Average 5-Year Revenue Growth: 56.99%
MercadoLibre, Inc. (NASDAQ:MELI) is an e-commerce and fintech company operating in Brazil, Mexico, Argentina, and internationally. It operates Mercado Libre Marketplace for online shopping, Mercado Pago for digital payments, Mercado Envios for shipping, and Mercado Credito for loans. The company had its biggest Cyber Monday yet in 2024, selling 7 million products, a 34% increase from last year. Shopping on the platform has been picking up all year, especially in Q3 2024. The most popular categories were Supermarket, Health & Sports, Tech & Appliances, and Fashion & Beauty, with more than half of purchases made in installments.
MercadoLibre, Inc. (NASDAQ:MELI)’s Q4 2024 revenue increased 37% year-over-year to $6.1 billion and net income was $639 million. Its platform saw over 67 million unique buyers in the fourth quarter and crossed 100 million buyers in the past year. A big part of this success comes from smart investments in logistics, product variety, and user experience. In 2024, Mercado Libre opened 10 new fulfillment centers, expanded free shipping, and brought in premium brands like Lancôme and Ralph Lauren. Moreover, nearly half of all shipments in Q4 were delivered within a day. MELI ranks 4th on our list of high growth stocks to consider.
Among the hedge funds tracked by Insider Monkey in the fourth quarter, 96 funds were bullish on MercadoLibre, Inc. (NASDAQ:MELI), compared to 87 funds in the earlier quarter. Arrowstreet Capital was the biggest stakeholder of the company, with 545,292 shares valued at $927.2 million.
Overall, MELI ranks 4th on our list of the best high growth large cap stocks to invest in. While we acknowledge the potential of MELI to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MELI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
