If you're a growth-focused investor, chances are that your portfolio struggled over the last year. With plenty of uncertainty still on the horizon, it's impossible to say what the future holds for the market in the near term. The good news is that investors can actually capitalize on today's otherwise challenging conditions and prepare for the next bull market by building positions in promising stocks at prices that leave room for explosive long-term upside. 

While macroeconomic and geopolitical risk factors have generally depressed valuations for growth-dependent technology companies, the upside is that big sell-offs have pushed valuations for some top businesses with long expansion avenues down to attractive levels. Read on for a look at two category-leading businesses that are crushing it in their respective industries and have what it takes to deliver market-beating returns for long-term shareholders. 

A rocket launching from a person's hand.

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Cloudflare: Betting big on driving growth and innovation

If Cloudflare's (NET -2.42%) collection of web services went down, internet users would probably notice a change almost instantly. The company's software for protection against distributed denial of service (DDoS) attacks ensures that web pages and applications can't be taken offline by a flood of malicious server requests. Its content delivery network (CDN) services employ edge computing to speed up the rates at which data can be sent and received around the world. And its domain name system (DNS) services provide a phone-book-like function that ensures web destinations can be looked up and accessed as users move around the web. 

Even in the face of macroeconomic pressures, Cloudflare managed to increase revenue 42% year over year in the fourth quarter to reach $274.7 million. The company delivered record operating cash flow of $78.1 million in the period, good for a 28% margin. Meanwhile, free cash flow (FCF) in the period came in at a best-ever $33.7 million in the period and represented 12% of total revenue in the quarter.

Cloudflare's net revenue rate of 122% in Q4 shows that customers are seeing value in its services and ramping up spending through its platform, and business momentum with large customers looks very encouraging. With 81 customers generating more than $1 million in annual sales at the end of 2022, Cloudflare has grown the number of clients it has in that cohort at a 71% compound annual growth rate since 2019. 

While the company is shaping its strategy with operational efficiency in mind in order to meet more challenging economic conditions, Cloudflare continues to bet big on driving growth and innovation. Speaking on the payoffs of continuing to push the business forward, CEO Matthew Prince said in a press release, "There's no better time to outpace the competition and continue to deliver products on our customers' 'must-have' list."

With a promising long-term growth trajectory and shares trading down roughly 38% over the last year and 75% from their valuation peak, Cloudflare stock looks like a smart buy for growth investors right now.

Airbnb: Navigating challenges and generating great performance

In the travel, tourism, and hospitality space, Airbnb (ABNB -3.66%) has already been a game changer. More than 4 million hosts share their properties on the company's platform, and more than 1.4 billion guest stays have taken place through its service.

With its flexible, asset-light business model, Airbnb has expertly navigated challenges as they've arisen, and the business has been serving up fantastic performance as of late. The rental specialist posted revenue of roughly $8.4 billion last year, up 40% annually and 46% on a currency-adjusted basis. Posting free cash flow (FCF) of approximately $3.4 billion last year, Airbnb notched an FCF margin of roughly 40.5% -- a fantastic performance that looks even more enticing in the context of the company's considerable long-term sales growth opportunity. The business also recorded its first year of profitability under generally accepted accounting principles (GAAP), delivering $1.9 billion in net income for the period.

Even in the face of macro headwinds, management expects revenue to come in between $1.75 billion and $1.82 billion in this year's first quarter, suggesting approximately 18.5% year-over-year growth at the midpoint of the target. Airbnb is seeing some growth slowdown in conjunction with unfavorable macroeconomic conditions, but it should be able to continue growing sales, earnings, and free cash flow at solid clips this year.

Airbnb is fantastically positioned to continue shaping how people travel and live around the world, and the stock presents attractive upside potential for long-term investors.

With shares trading down 46.5% from their high, the company is valued at 21.5 times last year's free cash flow. I think those who take a buy-and-hold approach with the stock at today's prices will likely go on to enjoy market-crushing returns.