Investing in growth stocks can come with more risk, but the potential returns can be staggering. One prime example is Amazon, which has seen incredible growth over the years. Investors who bought £10,000 worth of Amazon shares in 2011 now have a nest egg worth almost £200,000.
While Amazon has dominated the e-commerce industry in North America, the UK, and Europe, it has struggled to expand into other international markets such as Latin America. One key player in this region is MercadoLibre, a company that offers a similar e-commerce platform to Amazon but focuses on digital payment processing instead of cloud computing.
With a market cap of $81bn, MercadoLibre’s shares are currently trading at a similar price point as Amazon did in 2011. The company’s first quarterly results for 2024 showed strong growth, with gross merchandise volume expanding by 20% year-on-year and net revenue growing by 30%.
Despite its impressive track record, MercadoLibre faces challenges such as political and economic instability in the Latin American market. For example, economic conditions in Argentina, a key market for the company, have been problematic due to fiscal reforms and a recession.
However, with a solid track record of navigating challenging conditions, some investors see the potential in MercadoLibre’s growth prospects. The company’s focus on digital payment processing could position it for long-term success, potentially surpassing Amazon in the future.