Economic uncertainty hit the stock market like a wrecking ball this year. The Nasdaq Composite is currently 29% off its high, putting the tech-heavy index deep in bear market territory. During that downturn, PayPal Holdings (PYPL -1.12%) and Datadog (DDOG 0.18%) have seen their share prices plunge 76% and 62%, respectively, from all-time highs, marking their sharpest declines at any point in history.

That creates a rare buying opportunity for growth stock investors.

1. PayPal: Consumer adoption of digital wallets is on the rise

The PayPal brand is synonymous with digital payments. Unlike traditional payment processors, PayPal operates a two-sided network that provides financial services to both businesses and consumers. That advantage helped the company build trust on both sides of transactions, supercharging the network effect that powers its business.

In fact, according to CEO Dan Schulman, consumers are two times more likely to shop when a PayPal button is present on the e-commerce site. Similarly, research from Nielsen suggests that PayPal drives higher order values and more repeat purchases for merchants. Those qualities led to strong adoption. In fact, PayPal is the most accepted digital wallet in North America and Europe, and it ranked as the most downloaded mobile finance app worldwide during the first half of 2022, according to Apptopia.

Admittedly, the company struggled with various headwinds throughout the year, including the loss of eBay as a customer, the inflation-fueled deceleration in consumer spending, and the impact of unfavorable foreign exchange rates. Yet PayPal turned in a solid third-quarter report. Revenue climbed 11% to $6.8 billion and free cash flow soared 37% to $1.8 billion.

Looking ahead, investors have good reason to believe PayPal could further accelerate growth. The company recently deepened its ties with Apple by adding support for iPhone Tap-to-Pay technology to the PayPal and Venmo iOS apps. Consumers will also be able to add their PayPal- and Venmo-branded payment cards to their Apple wallets next year.

More broadly, Juniper Research says the number of digital wallet users will grow 53% to 5.2 billion worldwide by 2026. That trend should be a major tailwind for PayPal, given its strong market presence. And with shares trading at 3.2 times sales -- near the cheapest valuation since PayPal was spun off from eBay in 2015 -- investors should jump on this rare buying opportunity.

2. Datadog: Digital transformation creates a need for observability software

Modern enterprises depend on numerous digital technologies, from software and servers to cloud services. Datadog keeps those systems running smoothly. Its platform gathers and processes signals in real-time from across enterprise IT environments, helping customers improve the performance and security of their applications, networks, and infrastructure.

Like most great tech companies, Datadog has showcased a remarkable capacity for innovation over the years. In 2018, it became the first to combine the three pillars of observability (i.e. metrics, traces, and logs) on a single platform, giving customers unparalleled visibility across their software-powered systems. Since then, Datadog has continued to expand its platform, adding tools for user experience monitoring, cloud security, and incident management, as well as a powerful artificial intelligence engine that surfaces proactive alerts and automates root cause analysis.

The breadth of the Datadog platform is a key advantage, and it comes with over 600 prebuilt integrations that simplify adoption for customers. Those attributes have helped the company carve out a strong presence in observability software. In fact, IT research specialist Gartner named Datadog a leader in application performance monitoring in June. Similarly, software research marketplace G2 recognized Datadog as a leader in database monitoring and cloud infrastructure monitoring in its Fall 2022 report.

In the third quarter Datadog increased its customer count 27% to 22,200, and the company has maintain a net retention rate above 130% for the last 21 quarters, meaning the average customer is consistently spending over 30% more each year. Driven by that compounding dynamic, third-quarter revenue rose 61% to $437 million and non-GAAP earnings soared 77% to $0.23 per diluted share. Better yet, investors should expect that momentum to continue in the coming years.

As a key enabler of digital transformation, Datadog's software should only become more important over time, as enterprises continue to adopt more software and cloud services. In fact, management puts its market opportunity at $62 billion by 2026, up from $41 billion in 2022. And with shares trading at a reasonable 15.7 times sales -- a bargain compared to a three-year average of 38.8 times sales -- now is a good time to buy this stock.