2 Great Stocks You Can Buy on Sale Right Now

When your portfolio is rising, it's easy to be a long-term investor. But it's much harder to maintain that mindset when prices plunge. It can be unnerving to watch a stock drop 30% (or more), but it's something you'll likely encounter many times, especially if you invest in growth stocks.

So, how should you handle those situations? First, remind yourself that no one knows the future. You may be tempted to sell your position and buy it back at a later date, but trying to time the market rarely works. Second, revisit your investment thesis. If everything still checks out, then consider doing nothing or even adding to your position.

With that in mind, Pinterest (PINS -1.55%) and UiPath (PATH -1.52%) are down 39% and 40%, respectively, from their all-time highs. In both cases, these declines were brought on by financial guidance that failed to meet Wall Street's expectations. But Pinterest and UiPath still look like smart long-term investments. Here's why.

Image source: Getty Images.

1. Pinterest

Pinterest blends visual search and social media, enabling users to engage with content like articles, images, and videos. This helps people discover new ideas, whether that means buying a trendy summer dress, trying a tasty recipe, or planning a tropical vacation. Pinterest users can also follow their favorite brands and creators such as athletes, designers, and makeup artists.

In short, Pinterest is designed to inspire people, and that differentiates it from other social networks. Put another way, because people are actively looking for ideas, digital ads fit more organically into the platform -- they're actually helpful, rather than intrusive. In fact, advertising on Pinterest yields twice the return on investment as ads on other social media, according to the company.

That value proposition has translated into strong top-line growth over the past year, despite a deceleration in monthly active users during the most recent quarter.

Data source: YCharts. TTM = trailing 12 months. YOY = year over year.

Last year, Pinterest saw a sixfold increase in the number of brands advertising on the platform, and the company is well positioned to maintain that momentum. In the recent shareholder letter, management discussed piloting on-platform transactions later this year, meaning consumers will be able to make purchases directly through Pinterest. That should reduce friction at checkout, further reinforcing the value for advertisers.

More broadly, eMarketer values the digital ad market at $455 billion this year, putting Pinterest in front of a massive opportunity. And given the recent pullback in its share price, now looks like a good time to buy this growth stock.

2. UiPath

In recent decades, the world has undergone rapid digitization, giving rise to numerous novel technologies, but many employees still perform tedious, repetitive tasks by hand on a daily basis. For instance, have you ever spent hours reading through emails, completing forms, or moving data between applications? I certainly have.

UiPath aims to solve this problem by automating enterprise workflow. Specifically, its platform blends three technologies: robotic process automation, artificial intelligence, and low-code development. This allows clients to identify work suitable for automation, then build and deploy software robots (with user-friendly drag-and-drop tools) capable of automating those tasks.

How does that work? These bots rely on various types of artificial intelligence, including natural language processing, computer vision, and machine learning, which collectively allow them to read and understand language, emulate human behavior, and make complex decisions. More importantly, software bots can perform those tasks more consistently and cost-effectively than people. In fact, UiPath believes its platform improves operational efficiency by 30% to 40%.

That value proposition has translated into strong growth in recent quarters.

Data source: UiPath SEC Filings. TTM = trailing 12 months. YOY = year over year. *Note: Q2 2022 ended July 31, 2021.

Last year, the company captured eight percentage points of market share, adding more revenue to its top line than the next nine competitors combined. And in a recent report, Forrester Research recognized UiPath as the RPA (robotic process automation) industry leader, citing a stronger offering and growth strategy than any of its rivals.

Currently, management puts its market opportunity at $60 billion, leaving plenty of room for UiPath to grow its business. And given the recent pullback in its share price, now looks like a good time to start (or build on) a position in your portfolio.