Tech Sell-Off: 2 Growth Stocks Investors Might Regret Not Buying on the Dip

Following the recent stock market sell-off, investors may want to reconsider their decisions on two promising artificial intelligence (AI) stocks that have recently been overlooked. Datadog and Palo Alto Networks have both seen significant declines, presenting potential buying opportunities for those willing to wait out the market volatility.

Datadog, a leading provider of cloud observability platforms for businesses relying on digital infrastructure, has witnessed a 20% decrease from its June peak. The company's recent enhancements, such as LLM Observability and GPU Monitoring, cater specifically to the growing AI sector, with 10 of the top AI companies already utilizing their services.

Despite this strong market presence, Datadog's valuation remains high, trading at a price-to-sales ratio of 24.3, which is considerably above its three-year average of 17.7. This high valuation could make Datadog an attractive option for investors who can tolerate a short-term dip, potentially offering a significant long-term gain.

Similarly, Palo Alto Networks, a major cybersecurity firm specializing in AI-driven solutions, has experienced a 20% decline amidst the market's downturn. The company's Prisma AIRS and Cortex XSIAM platforms, which monitor and automate security operations for AI-related activities, have gained substantial traction, contributing to a 63% increase in annual recurring revenue (ARR) to $9 billion in the 2026 fiscal year.

Palo Alto Networks' products are critical for protecting businesses from evolving AI-related threats, as malicious actors increasingly use AI to exploit vulnerabilities. With a current price-to-sales ratio of 22.6, Palo Alto Networks might also present an appealing investment opportunity for those looking to capitalize on the broader market correction.