MercadoLibre (MELI) Slid in Q3 Despite Reporting Strong Results

Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q3 2025, the fund gained 5.7% (Institutional Shares) compared to the Russell 1000 Growth Index’s (R1KG) 10.5% gain and the S&P 500 Index’s (SPX) 8.1% return. The fund is up 14.4% YTD compared to 17.2% and 14.8% for the indexes. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Baron Fifth Avenue Growth Fund highlighted stocks such as MercadoLibre, Inc. (NASDAQ:MELI). MercadoLibre, Inc. (NASDAQ:MELI) is an online commerce platform that operates Mercado Libre Marketplace and Mercado Pago FinTech platforms. The one-month return of MercadoLibre, Inc. (NASDAQ:MELI) was -10.46%, and its shares gained 7.00% of their value over the last 52 weeks. On December 01, 2025, MercadoLibre, Inc. (NASDAQ:MELI) stock closed at $2,064.55 per share, with a market capitalization of $104.667 billion.

Baron Fifth Avenue Growth Fund stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its third quarter 2025 investor letter:

“MercadoLibre, Inc. (NASDAQ:MELI), the leading e-commerce marketplace across Latin America, detracted from performance as shares declined 10.6% due to macro and competitive pressures and despite strong quarterly results across GMV – up 21% year-on-year, total payments volume – up 39%, and revenues – up 34%. On the macro side, the sharp sell-off in Argentine assets weighed heavily on the shares given that Argentina represents roughly 20% of MercadoLibre’s revenues and 40% of direct group contribution. The Argentine business, which had been a source of recent growth upside and upward forecast revisions, now faces potential downside as consumer confidence and currency stability have deteriorated. At the same time, Amazon, one of MercadoLibre’s largest competitors in the region, announced new promotional rates for sellers in Brazil, reinforcing concerns around intensifying competition in e-commerce. While these factors drove near-term pressure, we maintain conviction in MercadoLibre’s long-term opportunity: the company remains uniquely positioned to capture a large share of Latin America’s underpenetrated e-commerce and fintech markets, with scale, brand trust, and a powerful ecosystem that continue to provide significant competitive advantages.”

Is MercadoLibre, Inc. (MELI) Among The Aggressive Stocks Picked by Hedge Funds?

MercadoLibre, Inc. (NASDAQ:MELI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 109 hedge fund portfolios held MercadoLibre, Inc. (NASDAQ:MELI) at the end of the third quarter, which was 116 in the previous quarter. In Q3 2025, MercadoLibre, Inc. (NASDAQ:MELI) reported 39% year-on-year growth. While we acknowledge the risk and potential of MercadoLibre, Inc. (NASDAQ:MELI) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MercadoLibre, Inc. (NASDAQ:MELI) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered MercadoLibre, Inc. (NASDAQ:MELI) and shared the list of best consumer cyclical stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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