The Nasdaq Composite index fell into a bear market this year as investor sentiment deteriorated, in part, on concerns about inflation and fears of a recession. During that upheaval, shares of Airbnb (ABNB -0.03%) and Costco Wholesale (COST 0.56%) dropped 60% and 25%, respectively. Some billionaire hedge fund managers have treated that drop as a buying opportunity.

Since the beginning of the year, Jim Simons of Renaissance Technologies has doubled his stake in Airbnb and quadrupled his stake in Costco. Meanwhile, David Siegel of Two Sigma Advisors doubled his position in Airbnb, and David Shaw of D. E. Shaw & Co. tripled his position in Costco.

Is it time to buy these two growth stocks?

1. Airbnb: A disruptive force in the travel industry

Airbnb took the travel industry by storm with its asset-light business model. Whereas typical hospitality companies spend millions of dollars to build a single hotel, Airbnb sources properties from 4 million global hosts and counting. That affords the company a significant advantage. Airbnb can more quickly and cost-effectively expand its inventory, and it can provide guests with a broader selection of travel properties -- anything from rural farmhouses and urban apartments to tropical treehouses and beachside bungalows.

Airbnb delivered a strong third-quarter earnings report, in spite of the challenging economic environment. Revenue climbed 29% to $2.9 billion and free cash flow (FCF) soared 81% to $960 million, which equates to an impressive FCF margin of 33%. Shareholders have good reason to believe that momentum will continue. Airbnb has hardly scratched the surface of its $3.4 trillion addressable market, and its capacity for innovation should keep it at the forefront of the travel industry for years to come.

In the past year, the company debuted several services that enhance its value proposition on both sides of the platform. For hosts, Airbnb launched reservation screening technology to reduce the chance of disruptive parties, and it expanded its free property damage insurance to $3 million in coverage, which ranks as the highest payout in the industry.

For guests, Airbnb added dozens of search categories that build on its launch of flexible search parameters in the previous year. Those tools allow guests to identify specific property types (e.g. beachfront, countryside, vineyards) and discover stays in places they may have never thought to look. In other words, Airbnb is evolving into a travel recommendation engine that can point demand toward supply, helping the company utilize its inventory more effectively.

Currently, shares trade at 7 times sales, the cheapest valuation since Airbnb went public in 2020. At that price, investors should seriously consider buying a small position in this disruptive growth stock.

2. Costco Wholesale: A case study in operating efficiency

Costco is the third-largest retailer in the world. The company employs a membership-based business model that has drawn more than 120 million cardholders, due in large part to its reputation for bargain prices across a wide variety of merchandise, from food and gas to jewelry and pharmaceuticals.

Costco achieved that success through operating expertise. The company carefully evaluates products based on quality and price, and it only keeps about 4,000 stock-keeping units (SKUs) in its warehouses, far less than the 30,000 SKUs found at most supermarkets. That reinforces the pricing power created by Costco's scale, as suppliers must compete for limited shelf space.

Costco also develops a number of products internally through its Kirkland Signature private label. That vertical integration means the company can typically undercut the pricing of other national brands while still earning higher profit margins.

In the most recent quarter, member traffic in Costco warehouses rose 3.9%, and the average ticket price increased 2.6%, evidencing its ability to grow in a difficult economic environment. In turn, revenue climbed 8% to $54.4 billion and earnings ticked 3% higher to $3.07 per diluted share.

Going forward, Costco is well-positioned to grow its business as more consumers look for ways to save money. The company is also investing in several initiatives that should create more value for its members. That includes transitioning from vendor drop shipments to direct shipments through Costco Logistics, a last-mile delivery service that lowers the cost of merchandise and improves shipping times for buyers.

Currently, shares trade at 34.7 times earnings, a slight discount to the five-year average of 36.2 times earnings. That certainly doesn't qualify as a bargain, but it's reasonable for investors to buy a very small position in this growth stock right now.