We recently compiled a list of the 12 Best Fintech Stocks to Buy in 2025. In this article, we are going to take a look at where MercadoLibre, Inc. (NASDAQ:MELI) stands against the other fintech stocks.

The terms finance and technology are combined to form the term fintech. This wide category includes companies that integrate modern technology into financial operations. Fintech companies include, for instance, those that create and run person-to-person payment applications and those that develop innovative digital payment processing solutions.

Many fintech stocks have recovered from the post-COVID-19 down market, but they are still well below their peak as we approach 2025. Nonetheless, the fintech industry has numerous opportunities for long-term potential.

In 2025, fintech is beginning to rebound. Global fintech funding rose to $8.5 billion in Q4 of 2024, a 12% increase from the previous quarter, according to CB Insights. While overall 2024 funding decreased 20% year on year, this is a significant improvement from the 48% and 44% declines in 2023 and 2022, respectively, showing that capital flows to the industry have stabilized.

The regulatory sentiment is also altering. For example, in a statement released on January 21, Travis Hill, acting chairman of the Federal Deposit Insurance Corporation, provided a list of priorities, including plans to

“adopt a more open-minded approach to innovation and technology adoption, which includes a more transparent approach to fintech partnerships and to digital assets and tokenization, and engagement to address growing technology costs for community banks.”

This suggests a more relaxed regulatory framework, which could stimulate a resurgence of fintech activity.

The fact that some of the biggest fintech companies, such as Swedish buy now, pay later unicorn Klarna and neobank Chime, are now indicating plans to go public is another significant clue that the industry is recovering from the blues. Furthermore, since financial monitoring is a crucial component of public markets, this probably signals profitability improvement, which has been a significant difficulty for the fintech industry.

Tyler Griffin, managing partner and cofounder of Restive Partners, stated to American Banker:

"I’d bet that the chief financial officer of every late-stage, privately funded company is at least exploring what an IPO in the near term looks like.”

The financial technology industry has never been static; rather, it thrives on challenging the status quo. Financial services have changed in recent years due to a combination of technological developments, regulatory changes, and economic disruptions. In 2024, fintech saw a massive spike in the usage of AI, mostly for internal use cases like operational efficiency and fraud detection. However, issues with accuracy and privacy continue to restrict consumer-facing applications. According to a Deloitte survey, the biggest obstacle to generative AI adoption in financial services, according to 35% of enterprises, is real-world errors. Financial organizations are hesitant to use AI tools directly with customers because of regulatory sensitivities. Nonetheless, enterprise adoption is speeding up. Within a year, Morgan Stanley introduced its "Debrief" assistant, which OpenAI powers. Meanwhile, BNY Mellon and OpenAI have partnered for several years.

Our Methodology

For this article, we sifted through the Fintech ETFs and online rankings to form an initial list of the 25 Fintech Stocks. From the resultant dataset, we chose 12 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 1009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks.  We have used the stock's revenue growth year-over-year as a tie-breaker in case two or more stocks have the same number of hedge funds invested.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A customer using their phone to access an online commerce platform.

MercadoLibre, Inc. (NASDAQ:MELI)

Number of Hedge Fund Holders: 96

The largest e-commerce platform in Latin America is operated by MercadoLibre, Inc. (NASDAQ:MELI), which, as of the last report, has over 218 million active customers and 1 million active vendors in 18 countries using its financial solutions or commerce network. In addition to its primary online store, the company runs several supplementary businesses.

MercadoLibre, Inc. (NASDAQ:MELI) has a massive e-commerce business that generates well over $50 billion in merchandise sales volume annually and is still expanding at a remarkable rate. In recent years, the company has also established a financing business (Mercado Credito) and a logistics platform (Mercado Envios), both of which have seen significant growth. Mercado Credito is especially appealing, with a 77% year-over-year increase in the credit portfolio by late 2024, making the company one of the Best Fintech Stocks to buy in 2025.

From a fintech standpoint, though, the most attractive is the Mercado Pago payments platform. The company handles over $200 billion in annual payments and is expanding far more quickly than the e-commerce industry. The fact that Mercado Pago is expanding the fastest in terms of accepting payments outside of MercadoLibre, Inc. (NASDAQ:MELI)'s e-commerce platform is the most encouraging.

Joao Pedro Soares, a Citi analyst, maintained his Buy recommendation on MercadoLibre, Inc. (NASDAQ:MELI) shares and increased the price objective from $2,400 to $2,450. According to the firm, reduced country risk more than offsets the devaluation of the Argentine peso.

Lakehouse Global Growth Fund stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its February 2025 investor letter:

“The Funds largest position, e-commerce leader MercadoLibre, Inc. (NASDAQ:MELI), delivered another impressive quarterly result, combining robust growth with improving profitability. Net revenue grew 37% year-on-year in U.S. dollar terms to $6.1 billion while operating margins climbed to 13.5%, which was particularly pleasing given the company remains firmly in reinvestment mode. Key operational metrics for its marketplace underscored this strength, with items sold increasing 27%, unique buyers climbing 24% to a new high of 67 million and items per buyer increasing to 7.8. Importantly, the company continues to gain incremental market share in its primary regions, namely that of Brazil and Mexico.

The outperformance of the company’s advertising business also continues to be bright spot, growing 40% plus year-on-year in USD terms. As of today, the advertising business still only represents 2.1% of GMV, which is well below the level of more mature e-commerce peers globally and suggests there is still plenty of runway to grow the ads business. This not only provides another attractive growth vector but also a meaningful lever to improve profitability over time given the higher-margin nature of advertising revenue.”

Overall MELI ranks 4th among the best fintech stocks to buy in 2025. While we acknowledge the potential of MELI as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MELI but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks to Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.