The Nasdaq Composite dipped into a bear market early last year, and the tech-heavy index went on to deliver its worst performance since the Great Recession. But some wealthy hedge fund managers have been buying growth stocks hand over fist during the drawdown.

For instance, Ken Griffin of Citadel Advisors increased his stake in Tesla (TSLA 0.79%) by 2,500% last year, and he tripled his stake in Okta (OKTA 0.45%). Meanwhile, Steven Cohen of Point72 Asset Management started a position in Tesla, and he increased his position in Okta sevenfold.

Is it time to buy these growth stocks?

Tesla: Electric cars and autonomous vehicles

Electric carmaker Tesla hit several speed bumps last year. Consumer demand softened in response to high inflation and rising interest rates, while production faltered due to persistent supply chain problems and the three-week closure of Gigafactory Shanghai in the second quarter due to COVID-19 lockdowns. All told, Tesla delivered 1.3 million vehicles last year, up 40% from the prior year, missing its target of 50% growth.

However, Tesla still led the industry with 18.2% of battery electric vehicle sales, easily topping the next closest carmaker, BYD with 12.6% market share. Tesla also reported solid financial results last year. Revenue rose 51% to $81.5 billion, and GAAP earnings soared 122% to $3.62 per diluted share. Outsized growth on the bottom line hints at improving operating efficiency. Indeed, Tesla reported an industry-leading operating margin (among volume carmakers) of 17.2% in the fourth quarter, and management expects that trend to continue.

What's driving that efficiency? Tesla has the "most advanced manufacturing technology in the world," according to CEO Elon Musk. Its advantage in battery production is particularly noteworthy. Tesla makes battery packs at a lower cost per kilowatt hour than any peer, and battery packs are the costliest part of an electric car. But the company is also starting to reap the benefits of its full self-driving (FSD) software, a product that management believes will be its most important source of profitability in the long run.

Tesla recently launched its FSD Beta software to all customers in North America, and the company has a robotaxi slated for production in 2024. But the most important thing investors should know is that Tesla has far more autonomous driving data than any rival, and data is the cornerstone of artificial intelligence. That means Tesla is well positioned to be a leader in autonomous vehicles, an industry expected to grow at 40% annually to reach $2.1 trillion by 2030, according to Allied Market Research.

Suffice it to say the future looks bright for Tesla. And with shares trading at 7.4 times sales, a discount to the five-year average of 10.7 times sales, risk-tolerant investors should consider buying a small position in this growth stock today.

Okta: Cybersecurity software

Okta specializes in identity and access management (IAM), a branch of cybersecurity focused on ensuring only the right people have access to sensitive data and systems. Its platform enables businesses to authorize users and enforce access policies based on details like device, location, and behavior. It also leans on artificial intelligence to authenticate users based on risk.

The Okta Identity Cloud is the most comprehensive IAM solution on the market, according to management. It addresses workforce identity and customer identity, and features the broadest and deepest set of pre-built integrations. Those advantages have kept Okta on the leading edge of the IAM industry. In fact, consultancy Gartner recently recognized the company as a leader in access management for the sixth consecutive year.

Okta ran into economic and operational headwinds last year. Its customer growth slowed as businesses became more frugal in response to high inflation, and the company revamped its go-to-market strategy after its acquisition of Auth0 created confusion among sales reps. But solid financial results in the fourth quarter suggest Okta is back on track. Revenue increased 33% to $510 million, and the company reported non-GAAP earnings of $0.30 per diluted share, up from a loss of $0.18 per diluted share in the prior year.

Looking ahead, Okta is well positioned to maintain or even accelerate its momentum. IAM is the foundation of zero trust security, yet the vast majority of all breaches still involve compromised credentials. Management believes that creates an $80 billion addressable market and, while Okta is already well positioned to benefit, the company is strengthening its position with new products.

Okta launched its identity governance and administration product last year, which brings tools for automation and compliance reporting to its workforce identity cloud. Okta also has a privileged access management product in the pipeline for 2023, which will provide additional security for highly privileged accounts.

Currently, shares trade at 6.9 times sales, a discount to the five-year average of 24.3 times sales. At that price, investors should buy a small position in this growth stock.