Over the past month, tech stocks have been hammered and many have been getting sold off. Even high-quality stocks like Upstart Holdings (NASDAQ:UPST) and SEMrush Holdings (NYSE:SEMR) have fallen victim. 

Upstart and SEMrush have fallen about 47% and 28%, respectively, yet both companies have been executing and showed strength in their third-quarter reports. These drops have allowed these companies to trade at a discount, leaving prime opportunities for you and me to invest in these two monster stocks. Here's why I think you should take advantage of these prices. 

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1. Upstart: Starting a revolution

Upstart is bringing optimal credit to a segment of people that might have never received it before. The company partners with banks to determine credit worthiness in what some consider a radical way. Instead of using the standard FICO score by Fair Isaac, Upstart uses an artificial intelligence (AI)-based system with thousands of inputs ranging from education to application interaction. Upstart recognizes that only 40% of Americans have access to prime credit even though 80% of Americans have never defaulted on a credit product, and it wants to help those deserving of good credit get it. 

Upstart is the only major credit determination system that is deviating from the FICO score, and it is seeing major success. Many banks and financial institutions have understood the flaws of the FICO system for a long time, but because there hasn't been a high-quality alternative, banks couldn't move away from it. Now, however, many small banks are rapidly adopting Upstart: It has 31 bank partners compared to just 10 one year ago. 

The company is able to automatically approve 67% of loans with less than a 0.5% rate of fraud. Additionally, in an internal study, Upstart claims that it can approve 173% more loans at the same loss rate than traditional banks. These metrics show the key reason why Upstart has been so successful compared to larger banks: It allows its lending partners to approve more loans at a faster rate with almost no additional risk. 

Many investors would be happy to know that this company -- despite growing Q3 revenue by 250% year over year -- is profitable. The company has been able to ramp up development expenses by nearly 270% while maintaining a 13% net income margin, demonstrating its success in balancing profitability and rapid future growth. 

You would expect that the company has a sky-high multiple, but because many stocks have fallen off a cliff including Upstart, it is now valued at a more reasonable price. It currently trades at 25 times sales, a nice discount from the 60 times sales it traded at a few months ago. Additionally, its price-to-earnings-to-growth (PEG) ratio is just 0.07. The PEG ratio factors in the company's future earnings growth. A PEG ratio below 1 is typically considered undervalued.

This company has all it needs for success: It is the primary disruptor in a $5 trillion loan market, it has data showing how much better it is than the industry standard, and customers are starting to act on this data. If the company's AI can continue to see efficiency and effectiveness, I think Upstart could become a multi-bagger from here, and at these discounted prices, buying today could be a wise choice. 

2. SEMrush: A discounted leader

Whether it is through search advertising or social media, companies want to effectively advertise to their target audience and be visible, but deciding which marketing channel to take can be a tough one. The online marketing tool industry is a fragmented one, with dozens of small, niche players offering specific tools for companies to reach their target audience, but what many companies want is a unified platform that offers a plethora of tools so that companies can mix and match to find what strategy is right for them. This is exactly what SEMrush offers. 

It is the only pureplay that has this wide offering of solutions. Unlike niche competitors like Similarweb, SEMrush offers over a dozen marketing tools and strategies, and it's a market leader in almost all of them. It does compete with companies like Meta Platforms, but SEMrush has the advantage of neutrality. The company will help its customers find the place and strategy that will truly help them reach their target audience, whereas Facebook has incentives to convince customers to advertise on its own platform. 

SEMrush's combination of neutrality and broad offering has been exactly what many advertisers want, which is why almost 80,000 companies use its tools. Additionally, the company can convince those users to increase the number of tools they use. Its average revenue per user grew 20% year over year in its Q3, bringing its large number of customers deeper into its ecosystem of tools. 

The company is able to keep its costs relatively low, even with stock-based compensation. SEMrush is on the verge of profitability, losing roughly $600,000 in Q3 but still being profitable year to date. Because the tech sector is falling out of favor, SEMrush is valued at just 15 times sales. This has fallen from 25 times sales, making today's prices very appealing. 

Investor takeaway

Both of these companies hold sustainable competitive advantages that make them stand out from their competitors. When the stock market irrationally hits a broad sector, it can give great chances to buy high-quality companies on sale, and this is what is happening today. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.