With the Nasdaq Composite down roughly 27% from its all-time high, the tech-heavy index remains deep in the uneasy woods of bear market territory. But history shows the next bull market is more a question of "when" and not "if," and many top growth stocks with beaten-down valuations will eventually recover and reach new highs.

For long-term investors wiling to brave near-term market volatility in pursuit of strong returns, now could be a great time to build foundations for the next bull market. If you're on the hunt for growth stocks trading down big from their highs, read on to see why two Motley Fool contributors believe Snowflake (SNOW 3.44%) and Airbnb (ABNB -1.98%) have what it takes to deliver big wins for shareholders. 

A bull standing on a ridge.

Image source: Getty Images.

Snowflake is making Big Data make sense

Keith NoonanFor large businesses, cloud-based technologies and data analytics have never been more important, and the vast majority are already using cloud infrastructure services from multiple providers. Among enterprises surveyed by S&P Global Intelligence, 98% of respondents reported using or planning to use at least two distinct cloud infrastructure service providers. Additionally, 31% of respondents reported already using four or more cloud infrastructure services.

Snowflake's Data Cloud platform breaks down information-sharing walls between these different cloud services. This makes it possible for customers to get a more accurate and comprehensive data picture. 

The Data Cloud platform makes it possible to combine, store, analyze, share, and monetize information from otherwise siloed sources, and demand for these services has been strong. Snowflake managed to grow its total customer count by 31% year over year to reach 7,828 at the end of the fourth quarter. What's more, the company continues to have great success in attracting large customers and expanding relationships with those already using its platform. 

Snowflake ended the year with 330 customers generating more than $1 million in annual product revenue, up 79% on an annual basis. The company also ended the year by counting 573 members of the Forbes Global 2000 as customers, up 16% year over year.

By adding new customers and building relationships with existing clients, the company was able to grow product revenue by 70% to hit roughly $1.94 billion last year and recorded a non-GAAP (adjusted) free cash flow margin of 25% in the period. Management expects that some intense macroeconomic pressures will cause growth to decelerate to 40% this fiscal year but anticipates the company's free-cash-flow margin will once again come in at roughly 25%. It expects to have reached $10 billion in product revenue by its fiscal year ending January 2029.

Snowflake's growth-dependent valuation has been at odds with the macro headwinds that have been lately shaping the stock market, but the company provides pick-and-shovel services that push the Big Data revolution forward. With the stock trading down approximately 66% from its all-time high, long-term investors could score market-crushing returns with a buy-and-hold approach to shares at today's prices.

Airbnb is an excellent growth stock selling at a bargain price

Parkev Tatevosian: One company that's poised to benefit from a bull market rally is Airbnb. The worldwide travel facilitator was devastated by the onset of the pandemic. People booked fewer trips, and Airbnb's revenue collapsed. The company's revenue decreased from $4.8 billion to $3.4 billion between 2019 and 2020.

Thankfully, vaccines helped much of the world get COVID-19 somewhat under control and economies started reopening. That reopening allowed people to unleash pent-up demand for travel. After being cooped up at home for what seemed like an eternity, people want to get out of the house as often as possible. Airbnb is benefiting from this trend. Revenue exploded from $3.4 billion in 2020 to $8.4 billion in 2022.

The asset-lite business model Airbnb employs allows it to expand profits at a rate larger than the revenue expansion rate. Want proof? Airbnb's operating income went from a loss of $502 million in 2019 to a profit of $1.9 billion in 2022.

If a bull market rally occurs, it may increase consumers' enthusiasm and make them feel wealthier due to rising asset prices. In that case, Airbnb can ride that tailwind of increasing travel demand much longer.

ABNB PE Ratio Chart

ABNB PE Ratio data by YCharts.

The benefit of buying Airbnb stock now, before a market rally, is that it's selling at a relative bargain valuation. With a price-to-earnings ratio of 42, Airbnb stock is trading near its lowest price since it became profitable. 

Snowflake and Airbnb can once again be bull market darlings

Despite some significant macroeconomic challenges, Snowflake and Airbnb appear poised to continue posting solid revenue growth this year, and both stocks are looking much cheaper following big share-price pullbacks. When the next bull market rolls around, investors will warm back up to companies with forward-looking valuations. These two category-leading tech players are likely to see positive reappraisals when the shift toward bullish sentiment gains momentum.