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

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.

Revenue keeps improving, the way it has in each of its first two dozen years as a public company. Earnings increases are outpacing top-line growth for the fourth consecutive year. Netflix seems to be doing fine -- until you zoom in on the last few financial updates.

The 18% revenue growth it posted for the fourth quarter of last year was its strongest year-over-year jump in more than four years. That pace decelerated to 16% and then 13% for the first two quarters of this year, respectively. It actually missed its earlier top-line guidance in last month's second-quarter report , and its fresh outlook for the current period -- calling for an 11.7% increase -- was problematic.

Netflix went from posting its strongest quarterly revenue growth since the spring of 2021 to its weakest increase in three years in the span of just three reports. It's not the only thing weighing on the minds of Netflix shareholders. Netflix is back to offering free trial subscriptions in some markets. It also confirmed on its last earnings call that it's exploring a free subscription tier outside its home U.S. market.