MELI's 25th-Ranked $2.7B Volume Spur 166% Strategy Returns

Mercadolibre (MELI) rose 0.51% on August 5, 2025, with a trading volume of $2.71 billion—a 101.68% surge from the prior day—ranking 25th in the market. The stock’s earnings call highlighted a 30%+ year-on-year revenue increase, record $825 million in operating income, and 38% growth in advertising revenue. Fintech metrics, including 68 million active Mercado Pago users and a 91% rise in credit portfolio to $9.3 billion, underscored its expanding ecosystem. Strategic moves, such as lowering Brazil’s free shipping threshold, drove engagement and gross merchandise value (GMV) acceleration, while AI integration in advertising and logistics signaled long-term operational efficiency.

Margin pressures emerged from aggressive marketing spend and logistics investments, with operating margin contracting to 12.2% in Q2 2025. The company acknowledged short-term challenges, including a 50% rise in sales and marketing costs and a slight uptick in non-performing loans (NPLs) to 18.5%. However, asset quality improved, with 50–90 day NPLs falling below 7%. Executives emphasized balancing growth in lower-ASP (average selling price) categories with margin sustainability, particularly in Brazil, and highlighted Argentina’s 77% revenue surge as a key growth driver.

The strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day returned 166.71% from 2022 to the present, outperforming the benchmark by 137.53%. This underscores the impact of liquidity concentration in volatile markets, where high-volume stocks like MELI saw significant price movements driven by institutional and algorithmic trading. The backtest highlights the role of liquidity-driven strategies in capturing short-term gains, particularly in markets where trading volume and institutional activity align with strategic market entry points.