2 Beaten-Down Growth Stocks to Buy During This Pullback

The Canadian stock market has come crashing down in recent weeks. The broader market is now down more than 5% year to date, with many high-quality growth stocks trading at a loss much higher than that in 2022.

The tech sector in particular has taken the brunt of the market’s recent selloff. Investors are now beginning to question some of the sky-high valuations that had become the norm over the past two years. 

Despite the significant pullback we’ve seen as of late, though, many of those businesses have not fundamentally changed. Just because a stock price has been cut in half doesn’t necessarily mean the business is in trouble.

Now’s the time to be investing in growth stocks

With the market in a temporary downtown, I’d urge all long-term investors to take advantage of some of the discounts on the TSX.

It’s not easy to invest while the market is dropping at the speed as it has been lately. However, you’ll be thanking yourself in a few years’ time for putting some cash to work while the market is selling off.

Here are two top discounted growth stocks to add to your watch list today.

Shopify

It’s hard to believe how much Shopify (TSX: SHOP)(NYSE:SHOP) stock has fallen since late 2021. The tech stock has dropped a staggering 75% over the past six months.

It wasn’t that long ago that Shopify was the largest company on the TSX. Today, it’s nowhere near the market cap of the current leaders.

The tech company is coming off a quarter that didn’t impress the market. Shares tanked more than 10% the day that earnings were released.

Companies today, especially richly valued ones, are not getting the benefit of the doubt when it comes to earnings. A slight earnings miss could trigger a selloff. 

But despite the seemingly underwhelming quarterly results, the massive e-commerce market opportunity for Shopify continues to be an increasingly growing one.

I’ve already added to my Shopify position several times this year, and I might need to add to it again soon.

Descartes Systems

Descartes Systems (TSX: DSG)(NASDAQ: DSGX) is another Canadian growth stock that has been on the decline in recent months. Shares are down 30% over the past six months, while the S&P/TSX Composite Index has lost less than 10%.

Descartes Systems is in the business of logistics and supply chain management. The company provides a range of different solutions aimed at improving productivity for its customer supply chain management operations.

It may be a niche market but it sure is a growing one. Both consumers and businesses across the globe have felt the pain of supply chain issues throughout this pandemic, which certainly bodes well for Descartes Systems.

I’m betting that the tech company will only continue to see an increase in demand for its services in the coming years. As a result, I don’t think it will be long before shares are back to all-time highs.

I’ve got this growth stock at the top of my own watch list right now.