"Don't Move, Amazon"... This Company Rated as the Next-Generation MAG7

'Amazon of South America' Mercado Libre

NVIDIA, Apple, Alphabet, Amazon, Meta Platforms, Microsoft (MS), Tesla. These companies, known as the "Magnificent 7" (M7), have been the main drivers of the U.S. stock market. Who will be the next leader to take over their baton?

On the 24th (local time), CNBC reported, "As investors are actively searching for the next generation of IT companies to succeed the M7, Mercado Libre, one of the world's largest e-commerce companies, has been selected as Wall Street's top pick."

[Image source=Reuters Yonhap News]

Founded in 1999 during the height of the dot-com bubble, Mercado Libre currently accounts for about half of online sales in South America, including Brazil, Argentina, Mexico, and Chile, earning it the nickname "Amazon of South America." Headquartered in Delaware and listed on Nasdaq, the company's stock price has risen 34% this year, surpassing Amazon's 27% increase.

According to market research firm FactSet, about 90% of Wall Street analysts covering Mercado Libre have issued "buy" ratings, with an average target price of $2,268, approximately 8% higher than the current price of $2,111. There were no sell ratings.

Bradley Gerstner, founder and CEO of hedge fund Altimeter Capital, said, "Looking at companies like Mercado Libre reminds me of things we forgot while obsessing over M7 investments," adding, "It has great potential for expanding profit margins and acquiring customers." In the second quarter, Mercado Libre's revenue was about $5.1 billion, up 42% year-over-year, and its operating margin expanded to 14.3%.

Marcos Galperin, founder and CEO of Mercado Libre, recalled, "In Latin America, we had to build everything ourselves because there was no efficient logistics for P2P commerce or online payment systems." He said, "It was tough in the early days, but now I think it was actually a good thing." Since South America's e-commerce infrastructure was lacking, there were fewer competitors, which was effective for aggressively increasing market share. He added, "Half of the South American population either does not have or has limited access to bank accounts," noting, "There are many opportunities in the financial products sector as well."

CNBC noted, "Although Mercado Libre is called the 'Amazon of South America,' when CEO Galperin founded the company, the dominant player in the e-commerce market was eBay," pointing out, "Amazon was more like an online bookstore at the time." The report also analyzed, "E-commerce and online payments are steadily growing industries," and "South America has 600 million young people who are familiar with mobile environments."

This content was produced with the assistance of AI translation services.