During market downturns, growth stocks often get beat up the most, which can present attractive buying opportunities.
Robinhood stock has plunged amid a crypto correction, but there's so much more to the company's business than Bitcoin.
Duolingo's crash is overdone due to excessive fears about artificial intelligence (AI) gobbling the company's market share.
Investing in growth stocks with strong fundamentals can produce long-term returns that outpace the S&P 500 (SNPINDEX: ^GSPC). However, some of those same stocks go on sale during market reverses.
Growth stocks are usually more affected by headlines and macroeconomic data points than blue chip stocks. Although falling prices can be stressful for investors, it also presents attractive opportunities for investors who can see through the noise. These two stocks are some of the top picks to double up on right now.
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Robinhood (NASDAQ: HOOD) enjoyed a strong 2025 due to crypto tailwinds, and with those tailwinds turning into headwinds, the fintech firm has stumbled out of the gate. It's down by more than 30% year to date, but judging Robinhood based on its crypto segment would be a costly mistake.
The crypto part of Robinhood's business dropped by 38% year over year in Q4 2025, but it was up more than 300% in Q3 2025. However, the company has multiple segments that have continued to perform well over several years, such as stocks and options trading. Margin trading activity also surged, resulting in Robinhood's net interest revenue increasing by 39% year over year in Q4.
However, the biggest catalyst for Robinhood is its prediction markets. This part of the business is relatively new and reached 2.3 billion contract trades in Q3. The firm reported 2.5 billion contracts traded in October. That momentum helped the company close Q4 with more than 12 billion event contracts traded throughout 2025.
Its prediction market segment received a big boost in August when it launched NFL and college football contracts. Other transaction revenue came to $147 million in Q4, which was up by more than 300%.
Prediction markets were a key driver of this part of Robinhood's business. That's the type of catalyst that can help Robinhood regain momentum and tap into its recent history of outperforming the S&P 500.
Duolingo (NASDAQ: DUOL) has tested the resolve of its most ardent investors. The edtech stock has plummeted by more than 40% year to date and has fallen by more than 80% from last year's highs.
Some investors are concerned that artificial intelligence (AI) chatbots will replace Duolingo and other software companies, but Duolingo's downfall has been more pronounced than other software companies. The recent stock price tumble doesn't match Duolingo's financials; revenue rose by 35% year over year in Q4, which represents an acceleration compared to 24% revenue growth in 2024. It also wrapped up the year with net income that more than tripled.
People in the know are also befuddled about the market's reaction. A Duolingo director recently bought 5,000 shares, and Duolingo announced the authorization for a $400 million stock repurchase program. That buyback amount represents almost 10% of the company's shares outstanding.
Duolingo knows it has an opportunity to buy back its shares at a low price, and investors may benefit from following suit. Past results aren't a guarantee of future outcomes, and that rule of thumb may apply to Duolingo stock. But company leadership certainly believes that's the case based on the proposed buybacks.
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Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Duolingo. The Motley Fool has a disclosure policy.