Last Thursday, Amazon (AMZN 1.60%) and Pinterest (PINS -0.89%) reported second-quarter earnings. Wall Street apparently wasn't impressed with either report, and share prices dropped 8% and 18%, respectively, in the day following the release which put each stock even further below their 52-week highs.

What happened? Amazon's growth slowed and both companies provided weak guidance. Even so, long-term investors shouldn't panic. In fact, now looks like a good time to buy both of these growth stocks. Here's why.

Investor reviewing financial data.

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1. Amazon

Amazon dominates the U.S. e-commerce industry. According to eMarketer, the company will capture 40.4% of online retail spend this year, leaving second-place Walmart's 7% market share in the dust. What's the secret? Scale and efficient vertical integration.

Amazon's network of robot-equipped fulfillment centers and logistics solutions gives it an edge, helping the company better control shipping costs and the customer experience. In fact, Amazon has continuously set the bar for fast shipping, offering free one-day or same-day delivery on millions of items to its 200 million Prime members.

Moreover, Amazon's global marketplace receives 5.2 billion visits per month. The next closest competitor is eBay with just 1.7 billion visits. That scale not only reinforces Amazon's dominance in e-commerce, but it has also made the company a growing force in the digital ad industry. In fact, Amazon captured over 10% of U.S. digital ad spend last year, up from 2% in 2016, according to eMarketer.

Last but not least, growth in Amazon's cloud computing business Amazon Web Services (AWS) actually accelerated in the most recent quarter, jumping 37% year over year. That helped the company capture a 31% share of cloud infrastructure spend worldwide. Also noteworthy, research company Gartner ranks AWS as the leading cloud platform by a wide margin, attributing its "commanding lead" to its greater range of capabilities.

Here's the bottom line: Amazon's total revenue growth decelerated to 27% year over year in Q2 2021. Yes, that's down from 40% growth in Q2 2020, but it's certainly not slow growth. More importantly, this company has built an incredible moat around its business. And e-commerce, digital advertising, and cloud computing should only become more relevant in the years ahead. That's why you should consider adding this growth stock to your portfolio.

Two people sharing a mobile phone, scrolling through Pinterest.

Image source: Getty Images.

2. Pinterest

Pinterest blends elements of social media and visual search, allowing users to curate and engage with collections of images and video. For instance, you could use the platform to plan a wedding, find a trendy summer fashion, or try a new workout at the gym. In short, Pinterest is designed for inspiration.

As it turns out, that mission aligns well with the advertising goals of brands and marketers. Not surprisingly, Pinterest has seen an uptick in ad spend on its platform, as evidenced by the company's strong financial performance.

Last year, monthly active users (MAUs) jumped 37%, average revenue per user (ARPU) rose 12%, and total sales surged 48%. More importantly, that momentum has carried into 2021. During the second quarter, ARPU and revenue growth accelerated to 89% and 125%, respectively. And free cash flow hit an all-time high of $374 million.

So why did the stock drop? Pinterest saw MAUs grow more slowly in Q2 2021, up just 9%, and MAUs in the U.S. actually dropped 5% from the prior year. Of course, that has Wall Street worried, but I think the recent sell-off is an overreaction. After delivering supercharged growth throughout the pandemic, it's not surprising to see a slowdown as global economies reopen. More to the point, management is still executing on a strong growth strategy.

Pinterest recently debuted idea pins, a new content format that allows creators to publish multi-page videos. The company also plans to launch on-platform transactions later this year, further integrating its platform with e-commerce (and potentially entering the digital payments market). More importantly, Pinterest is gaining traction internationally; the company introduced ads in Brazil and Mexico this year, and international ARPU surged 163% in Q2 2021.

Each of these initiatives should drive user engagement in the coming years. And that should help Pinterest capture more digital ad spend, a market that's expected to reach $455 billion in 2021, according to eMarketer.

Put another way, Pinterest has a strong growth strategy and a big market opportunity. That's why now looks like a good time to buy this growth stock.