The Federal Reserve has already raised interest rates three times this year in an effort to stamp out inflation, and it started reducing its balance sheet in June as another means of cooling the overheated economy. The central bank believes inflation, as measured by the price index for personal consumption expenditures (PCE), will fall to 5.2% by the end of the year. That figure still exceeds the 2% target, but it's a big improvement from 6.3% in May.

Unfortunately, rampant inflation has already taken a toll on the stock market. The benchmark S&P 500 and tech-heavy Nasdaq Composite have plunged 20% and 29.5%, respectively, from all-time highs. But the market tends to be forward-looking, and falling inflation in the second half of the year could spark the next bull market.

With that in mind, now looks like a good time to buy a few shares of Nvidia (NVDA 3.71%) and Cloudflare (NET -1.05%). Here's why.

1. Nvidia

Nvidia's chips are the gold standard in graphics and accelerated computing, and the company holds over 90% market share in both categories. In turn, its compute platform has become key to 3D design, robotics, and artificial intelligence (AI), and those technologies have applications across virtually every industry.

Nvidia's competitive edge is built around the graphics processing unit (GPU), a chip it invented in the late '90s. GPUs excel in rendering ultra-realistic visuals, but they're also very good at accelerating data center workloads. The company has since expanded its hardware portfolio with networking chips and switches, and it has introduced subscription software like Omniverse for creators and AI Enterprise for developers. Those moves have made its data center portfolio more robust.

That has translated into truly impressive financial results. Revenue soared 53% to $29.5 billion over the past year, gross profit margin rose 280 basis points to 65.3%, and free cash flow climbed 44% to $7.9 billion. Better yet, CFO Colette Kress said on the first-quarter earnings call that gross margins could continue to rise as software becomes a bigger percentage of revenue.

Going forward, the company puts its addressable market at $1 trillion, and Nvidia should benefit from potentially massive end markets like virtual reality and the metaverse, autonomous vehicles and machines, and all manner of AI-powered applications.

Currently, Nvidia stock is down about 56% off its high, trading at 12.5 times sales -- a bargain compared to its three-year average of 20 times sales. Of course, the stock may fall further if the macroeconomic environment continues to deteriorate. But the future is brimming with potential for Nvidia, so it's worth buying a few shares now.

2. Cloudflare

Cloudflare specializes in edge computing, a network architecture in which cloud services are delivered from data centers located close to users. To that end, its network spans hundreds of cities and interconnects with thousands of other networks, including every major internet service provider and cloud vendor. In turn, its servers sit within 50 milliseconds of 95% of internet users, allowing Cloudflare to accelerate and secure its customers' applications and networks.

That infrastructure gives the company an advantage. Internal studies suggest that Cloudflare typically outperforms other edge clouds like Fastly and public clouds like Amazon Web Services.

But the company is also an innovation powerhouse. Cloudflare Workers is a development platform that allows clients to build performance applications without managing the underlying infrastructure. Last year, Forrester Research recognized Workers as the best edge development platform on the market, and Cloudflare recently expanded its utility with integrated storage and database solutions.

Thanks to its strong competitive position and the broad tailwinds behind the cloud computing industry, Cloudflare consistently delivers monster financial results. Revenue soared 53% to $731 million in the past year, and the company generated $6 million in cash from operations. That paltry cash flow may concern some investors, but Cloudflare puts its total addressable market (TAM) at $115 billion, and management intends to run the business at breakeven to grab as much market share as possible.

On that note, a significant portion of its TAM comes from Cloudflare One, a secure access service edge (SASE) product that blends cloud network and security services. Cloudflare One enables employees to safely and securely access sensitive data and corporate resources from any device or location. That's particularly noteworthy because research company Gartner believes 60% of enterprises will have plans to adopt SASE products by 2025, up from just 10% in 2020.

Currently, Cloudflare stock is 79% off its high, and shares trade at 19.9 times sales. That may not be cheap by traditional standards, but it is a discount compared to the three-year average of 42.8 times sales. That's why this growth stock is a buy.