Is MercadoLibre, Inc. (NASDAQ:MELI) The Best Stock to Buy and Hold for 2 Years?

Yahoo

31-03-2025

We recently published a list of 10 Best Stocks to Buy and Hold For 2 Years. In this article, we are going to take a look at where MercadoLibre, Inc. (NASDAQ:MELI) stands against other best stocks to buy and hold for 2 years.
On March 27, CNBC reported that the stocks dipped on Wednesday, led by the technology sector. The S&P 500 dipped around 1.12%, followed by the Dow Jones, which fell by 132.71 points. More notably, the technology-dominated NASDAQ dropped by 2.40% closing at 17,899.01 points. The drop in the stock market was further aggravated by the White House's announcement of new tariffs on auto imports.
To talk about the future of technology and artificial intelligence Doug Clinton, Intelligent Alpha founder, joined CNBC for an interview on March 29. He mentioned that it has been more than a month now that the big technology names, especially artificial intelligence companies, are not performing so well. However, despite the recent dip, Clinton maintained his bullish sentiment for the sector. He pointed out that if we zoom out of the current situation and look at the sector from two to three years from today, we will still see AI stocks rally and large capital expenditure bills. Clinton pointed out that if you are a believer in AI trade it is important to remember that the market has had more than two years of absolutely no turbulence. This period of stability started from the end of 2022 to the beginning of 2025. Clinton categorized the current dip as the first real challenge for the AI trade. Referencing history, he pointed to the Dot Com era, when the Dot Com trade faced its first real challenge. The turbulence took 200 days to reach a new NASDAQ high back then. He clarified that this does not mean that the current turbulence will last 6 months, however, if someone believes in the AI trade then they need to be patient through the dip.
READ ALSO: and .
While talking about the valuations, Clinton highlighted that the question is about the kind of risks an investor wants to take during the trade. He noted that investors can choose to trade during the turbulence by exiting the market at high times, however, the risk is that the AI stocks can rise 20% to 30% in no time, making it difficult for investors to get back in. Clinton pointed out that he is looking at this trade from a two to three years lens. He believes that this will give him enough exposure and will also reduce the risk of missing out on the bigger picture.
To compile the list of 10 best stocks to buy and hold for 2 years we sifted through financial media reports. From these sources, we shortlisted stocks with more than 20% sales growth over the past 3 years. Next, we ranked these stocks in ascending order of the number of hedge fund holders, sourced from Insider Monkey's Q4 2024 database.
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 ().
A customer using their phone to access an online commerce platform.
MercadoLibre, Inc. (NASDAQ:MELI) is a leading fintech and e-commerce company based in Argentina. It primarily offers various services through its platforms including Mercado Libre Marketplace, Mercado Pago, Mercado Envios, and more. Its platforms enable sellers and buyers to engage in retail and wholesale commercial transactions.
On March 17, Morgan Stanley analyst Andrew R. Ruben maintained a Buy rating on the stock, highlighting that the company has developed a strategic position in the market with the potential to expand in the Latin American market. Ruben also noted that MercadoLibre, Inc. (NASDAQ:MELI) is focused on improving its logistic capabilities and is investing in its fintech and e-commerce platforms to gain market share, despite the competitive pressure.
Moreover, during the fiscal third quarter of 2024, MercadoLibre, Inc. (NASDAQ:MELI) demonstrated strong performance in gross merchandising value (GMV), total payment volume, and credit portfolio. All of which led to the company outpacing the markets in Argentina, Brazil, and Mexico. In addition, the improvements in value proposition resulted in growth in unique buyers, which surpassed 100 million during the quarter. During fiscal 2024, MercadoLibre, Inc. (NASDAQ:MELI) generated $21 billion in revenue and more than $1 billion as free cash flow, making it one of the best stocks to buy and hold for 2 years.
Hardman Johnston Global Equity stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its Q4 2024 investor letter:
'The top individual detractors from relative performance were MercadoLibre, Inc. (NASDAQ:MELI), IQVIA, and Universal Display Corp. MercadoLibre struggled due to a combination of fundamentals and an increasingly challenging macroeconomic environment in its primary regions, predominately Brazil. The issue within fundamentals was related to a shortfall in operating margins, as the company significantly invested across its platforms, with the addition of six new fulfillment centers aimed at regionalizing its distribution network to better serve and retain its commerce customer base and expand its credit card offering. While these investments caused a negative reaction in the stock's share price, the company has consistently demonstrated effective capital allocation in support of its medium and long term growth. Outside of the company's control, the outlook for inflation in Brazil deteriorated throughout the year, weighing on equities across the region. We continue to monitor the region's macroeconomic backdrop as a key investment risk for MercadoLibre, but we view the company as a best-in-class operator that will emerge in a better position on the other side of a macro recovery.'
Overall, MELI ranks 7th on our list of best stocks to buy and hold for 2 years. While we acknowledge the potential of MELI as an investment, our conviction lies in the belief that 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 .
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.