Netflix and MercadoLibre Are Underperforming the S&P 500. Here's the 1 Stock I'd Buy in August.

Netflix and MercadoLibre are trading 38% and 23% lower over the past year.

Both have fallen out of favor, and poorly received quarterly results this earnings season aren't helping.

Both stocks are historically cheap right now, even as they face stiff near-term headwinds.

Earnings season is a time for redemption, but sometimes even classic growth stocks can't seem to do enough to please the market. In a year when consumer-facing platforms are thriving, MercadoLibre (NASDAQ: MELI) and Netflix (NASDAQ: NFLX) are falling behind, trading 11% and 21% lower in 2026, respectively. It's a sharp contrast to the market's double-digit percentage rise this year.

And their latest quarterly updates didn't help turn sentiment around. MercadoLibre is sliding on Thursday after posting its latest results. Netflix also stumbled after disappointing investors last month.

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Let's take a look at both stocks that are underperforming the market this year. I happen to own both, but let's break down where each company is now before I let you know the one that I'm considering adding more of later this month.

Like the fifth and final season of Stranger Things , Netflix can't seem to please its audience. Netflix stock plummeted 38% over the past year, including a 9% slide in the two days following its disappointing second-quarter update in mid-July.