Although the market has demonstrated resilience amidst volatility this year, a few companies have particularly stood out, with MercadoLibre (MELI) and Netflix (NFLX) being prime examples, seeing their stock prices rise by 34% and 35%, respectively. Even after such significant gains, both companies still offer considerable long-term growth potential for patient investors.
As Latin America’s leading e-commerce platform, MercadoLibre’s strong performance this year is partly attributable to its relative insulation from the direct impact of the Trump administration’s tariff policies. While no company is entirely immune to trade tensions, MercadoLibre’s business structure makes it an attractive option for investors seeking a safe haven. The company reported revenue of $6.8 billion in the second quarter, a 34% year-over-year increase. Although net profit dipped slightly by 1.5% to $523 million due to currency fluctuations and tax rate adjustments, these issues are expected to be short-term. More noteworthy is its expanding business ecosystem, which encompasses e-commerce, fintech, logistics, and merchant services—complementary segments that together form a competitive moat centered around “switching costs.”
Similarly, Netflix has largely avoided the direct impact of tariffs, as its revenue primarily comes from streaming subscriptions and advertising rather than physical goods trade. The company continues to benefit from the global structural shift from traditional television to streaming, reinforcing its leading position through strong branding and content strategy. In the second quarter of this year, Netflix’s revenue grew 15.9% year-over-year to $11.1 billion, while earnings per share surged 47.3% to $7.19. Free cash flow also saw a significant increase of 86.9% to $2.3 billion. By leveraging both licensed and original content and utilizing vast user behavior data to refine content decisions, Netflix has created a typical network effect. Currently, Netflix accounts for less than 10% of TV viewing time in each country where it operates, indicating ample room for future growth. Additionally, its advertising business, though still small—with projected 2024 revenue of around $1.3 billion, representing only a small fraction of last year’s total revenue—serves as an important incremental growth driver. More users, higher engagement, and improved ad monetization will collectively fuel the continued expansion of its ecosystem.
Despite significant stock price increases this year, the strong business fundamentals and industry positions of both companies suggest they still possess the potential to outperform the market in the long run.
