The past year has been challenging for investors. The broad-based S&P 500 delivered its worst first-half performance in more than five decades, and the benchmark index has now declined for three consecutive quarters. Meanwhile, the tech-heavy Nasdaq Composite has slipped into its worst bear market in the last decade.

Those losses have left big dents in many portfolios, but smart investors know downturns are buying opportunities. Here are two spectacular growth stocks to buy now and hold forever.

Block: A disruptive fintech company

Block (SQ -1.14%) is the fintech company behind the Square and Cash App brands, both of which have been disruptive forces in their respective industries. The Square ecosystem comprises a suite of hardware, software, and banking services that simplify commerce. Those solutions integrate seamlessly, unlike the bundled products offered by traditional merchant services providers.

Similarly, Cash App is a digital wallet that simplifies consumer finance. It allows users to deposit, borrow, spend, and invest money from a single platform, and it ranked as the most downloaded mobile finance app in the U.S. in the first half of 2022, topping PayPal and Venmo. Better yet, Block recently added a discovery feature to the Cash App that allow consumers to browse and buy products from sellers that accept Afterpay or Cash App Pay. That strategy could supercharge adoption.

Despite a challenging economic climate, Block delivered impressive financial results in the third quarter. Cash App gross profit soared 51% to $774 million, while Square gross profit climbed 29% to $783 million. Collectively, total gross profit rose 38% to $1.6 billion and non-GAAP earnings climbed 68% to $0.42 per diluted share. More importantly, shareholders have good reason to be optimistic about the future. Block estimates its addressable market at $190 billion in gross profit, and its ambitious growth strategy should continue to drive market share gains.

Specifically, the ongoing addition of commerce capabilities to the Cash App should bring more users to the digital wallet, and that should drive more businesses to accept Afterpay and Cash App Pay. Meanwhile, Block is successfully growing upmarket and expanding into new geographies, as more mid-market sellers (i.e. those with over $500,000 in annual sales) and international sellers continued to adopt Square products in the third quarter.

Shares currently trade at 2.3 times sales, a noteworthy discount to the three-year average of 7.3 times sales. With that in mind, investors may regret not buying this growth on the dip.

Arista Networks: A leader in high-speed networking

Arista Networks (ANET 0.05%) provides high-performance networking equipment to data centers. Its core innovation is the Extensible Operating System (EOS), the unique software that powers its entire portfolio of switching and routing hardware. That single software product approach is fundamentally different from that of legacy vendors that use multiple operating systems, making network management more complex and costly.

In a nutshell, Arista enables businesses to integrate their IT ecosystems -- from public and private clouds to wired and wireless campus workspaces -- into seamless networks running a single operating system. What's more, Arista's networking platforms offer industry-leading performance, and the company has earned a reputation for world-class customer support, as evidenced by its net promoter score of 80.

Those advantages have carried the company to the forefront of the networking industry. In fact, Arista holds 41.5% market share in high speed data center switches, while second-place Cisco Systems holds just 22.5% market share. That dominance once again translated into strong financial results in the third quarter. Revenue climbed 57% to $1.4 billion, and GAAP earnings soared 61% to $1.13 per diluted share.

Going forward, investors have good reason to be bullish. Cloud computing and data-intensive applications (e.g. streaming media and artificial intelligence) will continue to strain modern data centers, creating a need for faster networking solutions. Arista -- as the market leader in high speed data center switching -- is positioned well to benefit from those trends. With that in mind, management puts its addressable market at $35 billion by 2025, leaving plenty of room for future growth.

As a caveat, shares trade at 10.4 times sales, slightly above the three-year average of 10 times, but this growth stock is still worth buying for patient investors.

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