The U.S. equity market has been witnessing tough times in 2022. So far this year, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite are down by 15%, 19%, and 27%, respectively. Investors are rightly concerned about the impact of rising inflation  and subsequent interest rate hikes, economic slowdown, supply chain disruptions, geopolitical tensions, and increasing COVID numbers on corporate profits.

However, this bear market is not all doom and gloom. Market corrections are known to present attractive entry points for retail investors to pick up fundamentally strong stocks at reasonable valuations.

Let's take a closer look at two such solid picks for July 2022.

1. CrowdStrike

Shares of leading cloud-native endpoint security specialist CrowdStrike (CRWD 0.14%) are down 35% from their all-time high. However, the extent of this correction seems unjustified considering that cybersecurity is a mission-critical service. Hence, corporate spending in this area will remain mostly unaffected especially since cyber threats are known to increase in a recessionary environment.

CrowdStrike's cloud-native Falcon security platform comprises 20 cloud-based modules. With 71% of the subscription customers opting for four or more modules in the first quarter of fiscal 2023 (ended April 30, 2022), it will be increasingly difficult for clients to switch to competing products.

CrowdStrike has also reported a dollar-based net retention rate (DBNRR) greater than the benchmark rate of 120% for its subscription annual recurring revenues (ARR) in the first quarter. This means that the subscription customer base as of the first quarter of fiscal 2022 spent over 20% higher on CrowdStrike products in the first quarter of fiscal 2023, even after including the impact of customer churn.

CrowdStrike has managed to create a powerful network effect, thanks to its leadership position in the endpoint security business. The company collects security signals across all the devices using its products, which are then analyzed with complex artificial intelligence algorithms to effectively predict future security events. With access to trillions of data points about security events, the company continues to strengthen its security offerings. This, in turn, helps attract new clients.

CrowdStrike has reported a solid 61% year-over-year jump in annual recurring revenue (ARR) (subscription-based revenues) to $1.9 billion and a 57% year-over-year jump in subscription customers to 17,945 at end of the first quarter. While not yet profitable, the company has been reporting a steady improvement in quarterly operating margins. The company also has a strong balance sheet with $2.15 billion cash.

All these points highlight the robust potential of CrowdStrike as an attractive investment opportunity in 2022.

2. UiPath

A longtime favorite of Ark Invest's CEO Cathie Wood, cloud-based enterprise automation services provider UiPath (PATH -0.42%) has seen its share price decline by 56% so far this year. This leading robotic process automation (RPA) player, however, has much to offer, especially in times of heightened wage inflation and a deteriorating economic environment. By automating repetitive and mundane tasks, UiPath is helping its clients reduce employee burnout and increase overall productivity.

The global RPA market is expected to grow annually at a compound average growth rate (CAGR) of 25% from $1.29 billion in 2020 to $7.64 billion in 2028. Being a dominant player in this space, UiPath is well poised to capture a significant share of this growing opportunity. With more and more companies deploying UiPath's bots for their everyday tasks, its RPA technology is learning and becoming even stronger. Thanks to this powerful network effect, UiPath's automation technology is becoming increasingly superior to the competition. Hence, clients are finding it difficult to switch to competing products.

UiPath's financial performance has been quite robust in the first quarter of fiscal 2023 (ended April 30, 2022). Revenues were up 32% year over year to $254 million in the first quarter. However, ARR, which is a measure of the strength of the company's subscription business, rose much faster by 50% year over year to $977 million. Although the company is not yet profitable, it is making progress in the right direction. Gross margins remain high at over 80%. UiPath also reported a DBNRR of 138%, implying that existing customers continue to increase their spending on the company's solutions.

UiPath had a cash balance of $1.8 billion and negligible debt at end of the first quarter. With a robust and recession-resistant business model, investors can consider this stock as an attractive option to ride out the current tough market.