What Happened?
Shares of latin American e-commerce and fintech company MercadoLibre (NASDAQ: MELI) jumped 6% in the afternoon session after investor optimism grew ahead of its upcoming Q3 earnings release, fueled by a new partnership in Brazil and positive momentum in its fintech business.
The key drivers for the positive sentiment were recent strategic moves, including a new partnership with retailer Casas Bahia. This development, combined with continued progress in the company's financial technology services, appeared to attract investor attention. The recent share price movement reflected the buzz surrounding these business updates as the company headed into its earnings announcement.
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 13 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 17 days ago when the stock dropped 5.5% on the news that the stock's negative momentum continued as Citigroup lowered its price target on the stock to $2,700 from $2,850.
The firm, however, maintained its "Buy" rating on the shares. The adjustment from analyst Joao Pedro Soares reflected a 5.26% decrease in the price target. While a "Buy" rating indicates a positive long-term view, a reduced price target can cause investor concern about a stock's near-term potential. This action suggested that even with a continued positive outlook, the analyst saw slightly less upside in the stock's value compared to the previous forecast, prompting a negative reaction in the market.
Adding to the weakness, markets pulled back as worries over worsening trade relations with China were triggered by critical comments from President Donald Trump. Trump targeted China's tightening controls on rare earth metals, which are vital components in many technology products from electric vehicles to defense systems. The president's tone and the suggestion of canceling a meeting with President Xi caused a rapid sell-off in the market.
MercadoLibre is up 29.6% since the beginning of the year, but at $2,287 per share, it is still trading 12.5% 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 $1,783.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
