What Happened?
Shares of latin American e-commerce and fintech company MercadoLibre (NASDAQ: MELI) fell 2.9% in the afternoon session after concerns grew over heightened competition in Brazil, its largest market.
The concerns followed Amazon's announcement of an aggressive expansion in the country, where it waived fulfillment fees and take rates for new merchants through the holiday season. This move was seen as a direct challenge to MercadoLibre's position. Adding to the competitive pressure, reports indicated that companies like Temu and Shein were also gaining ground by offering ultra-cheap goods in the region. Reflecting these worries, JP Morgan lowered its price target on the stock to $2,600 from a previous $2,700, signaling a more cautious outlook from the analyst.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy MercadoLibre? Access our full analysis report here.
What Is The Market Telling Us
MercadoLibre’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 7% on the news that investors locked in some profits amid broader macroeconomic concerns following a significant run since the start of the year. Give the absence of any company specific update, this move was likely amplified by a general "risk-off" sentiment in the market, fueled by the uncertainty of a potential U.S. government shutdown. Furthermore, a report showing an unexpected drop in U.S. consumer confidence added to the bearish mood for stocks.
MercadoLibre is up 24% since the beginning of the year, but at $2,189 per share, it is still trading 16.2% below its 52-week high of $2,614 from June 2025. Investors who bought $1,000 worth of MercadoLibre’s shares 5 years ago would now be looking at an investment worth $2,007.
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