MercadoLibre (MELI) sees over 50% of its revenue coming from Brazil, but Trump’s 50% tariff on Brazilian imports poses a threat. S&P upgraded MELI to investment-grade, citing strong performance and profitability. However, competition from Nubank in fintech and Amazon and Sea Limited in e-commerce could challenge MELI’s growth.

MELI stock is trading at a premium with a high P/E ratio compared to the industry average. Despite strong financial performance, the stock has underperformed the sector due to geopolitical risks and economic uncertainty in Brazil. Earnings estimates show steady growth, but the stock remains overvalued.

MercadoLibre is focusing on Mercado Ads for growth, offering sellers advanced digital advertising tools. The launch of Mercado Play on smart TVs is expected to boost ad revenue. MELI’s financial arm, Mercado Pago, plans to expand digital banking services in Latin America with a banking license in Argentina, enhancing growth prospects.

Considering tariff uncertainty and rising competition, holding MELI stock may be wise. The company’s expansion into digital banking and advertising offers growth potential. While valuation is high, steady revenue projections and innovation support long-term prospects. Investors should monitor Brazil’s macro environment and execution across new verticals.

Read more at Nasdaq: Should You Buy, Sell or Hold MELI Stock After Trump’s Tariff Pledge?