Why would a company report record sales and record profit, then see its stock price drop by double digits in a single day? Felix Prehn, an economist and former investment banker, says some of the crashes in front of you are the best buying chance of the year; some are the start of a long drop with no bottom.

Estimated reading time: 7 minutes

Tech Stocks For August: Felix Prehn's 3-Part Test To Tell A Dip From A Trap

The NASDAQ just had one of its worst weeks in years, and some of the best tech stocks fell the most right after posting record earnings. Felix Prehn promised one simple three-part test to separate a real bargain from an expensive mistake, and he runs it live on four stocks.

Read on to find out which technology stocks he'd buy in the current dip, the one popular stock he'd avoid, and how to size each buy so a wrong call costs you little.

Key Takeaways

• Learn which crashed tech stocks look like real bargains right now.
• Get a three-part test to tell a dip from a trap.
• Understand why record earnings can still crash a stock.
• See how much to buy so a wrong call won't wreck you.
• Get Felix Prehn's Winston app, free report, and live three-step system.

Tech Stocks For August Worth Buying In The Dip

Felix is showing his process here, not telling you what to buy, and he is not a registered investment advisor. Research each stock yourself. Here are the three stocks his test cleared, plus the popular one it failed.

Intel: A Tech Sector Recovery With Real Revenue Growth

Start with Intel, the clearest recovery in the tech sector right now. A year ago the stock traded near $24. Today it trades near $105.

The most recent quarter explains the price rise. Revenue grew 25%, up from 7% a year earlier, and profit per share came in at double what the stock market expected.

The earnings growth went deep. Intel's data centers and artificial intelligence division grew 59%, and its foundry business, where Intel makes chips for other companies, grew 31%.

Google just ordered 3 million chips, and Intel raised its guidance above the analyst forecasts. One warning is worth naming: the stock trades below its 50-day moving average line, the price level Felix checks, and buying below it is riskier.

QQQ And QQQM: The Top Tech Stocks In One Buy

Sometimes the simplest answer is a basket, not one company. QQQ gives you the 100 biggest technology stocks in the US in a single buy, so you get Nvidia, Broadcom, Microsoft, and Apple together. Felix has no sponsor here, and he wants to be clear about it.

If one stock drops, the other 99 keep the rest of your portfolio steady, and a broad index can't fall to zero the way a single stock can. Run the test and the business hasn't broken; the whole tech market dipped together, which is called rotation, money moving out of one area and into another.

For a buy-and-hold investor, QQQM is the same basket with lower fees, a simple way to save money over the long run. The S&P 500 moves the same way, so buying the dip and dollar cost averaging fit an index fund far better than they fit one company.

Philip Morris: Where The Big Money Moved Next

The third buy isn't a technology stock at all, and Felix bought it with his personal money yesterday. When big money sold Microsoft and Broadcom, the cash didn't disappear. It moved into calmer, defensive stocks making new highs.

Philip Morris is one of them. Over 40% of its revenue now comes from smoke-free products, led by Zyn, a nicotine pouch brand growing fast in the US and Japan, with FDA clearance to market itself as a reduced-risk product.

Revenue grew over 10%, the company beat its earnings, raised its guidance, and the stock price rose sharply. It went up during the tech selloff instead of down, and analysts keep raising their price targets, a clear sign big money is choosing to be there.

Tesla: The Popular Stock Felix Prehn Would Avoid

Now the stock Felix would avoid: Tesla. Same test, different result.

Tesla dropped about 15% after earnings, which looks like a bargain to a beginner. Check the business, though, and it got worse, not better.

Profit per share missed expectations. Car profit margins shrank below 17%, so Tesla now makes less money on every car it sells. Free cash flow went negative, and the company spent about $1 billion more than it brought in during a single quarter.

Even after the 15% drop, the stock trades at a forward price-to-earnings ratio above 200. The price reflects future earnings from robotaxis and robots Tesla hasn't sold yet, not the cars it sells today, while Chinese carmakers now outsell Tesla worldwide. Felix would rather buy where big money is moving in now than buy a stock still dropping fast.

Felix Prehn's 3-Part Test For Tech Stocks

The three picks came from one simple test you can run in about five minutes on any stock, any crash, any market.

Part 1: Did The Business Break?

Forget the stock price for a moment and ask one plain question: did the company get worse? Check whether revenue went up or down, whether the company met or raised its guidance, and whether any bad surprise showed up in the numbers.

Felix built the Winston app for the job. It shows revenue against expectations and has a "from the call" section with the important questions analysts asked the CEO, so you read only the parts worth your time.

Part 2: Is It One Stock Or The Whole Tech Sector?

A single stock dropping by itself is a warning. A whole sector dropping together is rotation.

Pull up two or three rivals, or open the semiconductor funds, and see whether the rival stocks fell too. When Nvidia, Micron Technology, and Broadcom all drop at once, money is exiting the sector, not leaving one broken company. If your stock drops while its rivals look fine, something is wrong with your company, and danger is the correct conclusion.

Part 3: What Is The Smart Money Doing?

Ignore the loud voices on social media and television; they tell you what they already bought. Watch the quiet people with real money on the line.

Insider buying matters most, because insiders sell for many reasons but buy for one: they expect the price to rise. Felix treats analyst price targets with heavy doubt, since the bank issuing a target usually earns money from the company it covers.

Why Record Earnings Growth Still Crashes A Stock

A record quarter and a falling stock sound like a contradiction, until you see how the market prices news. Here are the three reasons a great earnings report still drops a stock.

Reason 1: The Crowd Expected Too Much

The market doesn't price how good the news is; it prices the news against what everyone already expected. After months of a rising price, expectations grow very high. Solid results then look like a disappointment, and the stock drops even though the company did well.

Reason 2: Big Money Moves To Other Sectors

Pension funds, hedge funds, and sovereign wealth funds move billions in waves. When a fund decides it has too much in technology, it sells healthy tech stocks and shifts the cash into banks, insurance, or utilities. Your good stock drops because of where big money wants to be, not because of the business.

Reason 3: Funds Sell Winners To Buy The New Thing

When a huge IPO or a hot new sector arrives, funds need cash to buy it. So they sell their best, most easily traded stocks, because selling winners is the fastest way to raise money. The best stocks in a portfolio can drop simply because a large fund needed cash for something else.

All three reasons share one root: the mood of the people with money, not whether the business works. And telling a falling price apart from a failing company is exactly where the opportunity is.

How Much To Buy To Limit Your Risk

Even a real bargain can drop more before it rises, so how much you buy matters as much as what you buy. Three rules keep a wrong call from wrecking you.

1. Buy in pieces, not all at once. Split your money into two, three, or four parts and add it gradually. If the price drops further, you still have cash to buy more.
2. Size your positions down. Keep each buy small enough so a bad outcome is annoying, not devastating.
3. Know your exit before you buy. Write down the price or the drop meaning you were wrong, and leave when the price reaches it.

Felix Prehn's Free Report, App, And Live Seminar

Felix gives away everything he used to pick the four stocks, and none of it costs anything.

• The research report on all four stocks is free at felixfriends.org/3stocks.
• The Winston app has a 7-day free trial at app.goatacademy.org, where you can check a company's financials, guidance, and the "from the call" notes yourself.
• The live seminar, called "The Trading System That Makes Market Headlines Irrelevant," is free on Saturday at 9 a.m. New York time at bulletproofportfolio.org.

Felix spends about two hours walking through the exact system step by step, so the next time the NASDAQ drops 400 points in a day, you already know what to do. If you miss the session, there's no way to watch it later.

Frequently Asked Questions

What Pulled The Broader Market Down Recently?

Fear of artificial intelligence spending slowing or being wasted drove the drop. The chip sector fell about 9% in the past couple of weeks, which pushed the NASDAQ into a correction, a drop of at least 10%.

How Good Is The New Chinese AI Compared To American Software?

Felix tested some of the new Chinese AI on his personal software and found parts of it impressive. It cost about 5% of the American option. He switched back to the American tool for better language results, though the cheaper one fits repeat tasks well.

Does The Test Work On A Broad Range Of Software Stocks?

Yes. The three-part test works on any stock, in any crash, in any market. A software maker gets checked the same way as a chipmaker.

Do Politicians' Trades Show Any Growth Potential?

Felix says watching what politicians buy and sell can carry some value. Donald Trump put money into Intel just before its price rose sharply. Public figures sometimes have access to information most people do not.

Which Stocks Show The Clearest Market Leadership Inside QQQ?

Felix named Nvidia, Broadcom, Microsoft, and Apple as examples inside QQQ. The 100 biggest US technology stocks come bundled in one buy, so if one stock crashes, the other stocks soften the loss.

Do Analyst Forecasts Point To The Best Stocks For The Second Half?

Felix treats analyst price targets with a lot of skepticism. The bank issuing a forecast usually earns money from the company it covers, a clear conflict of interest.

Will Buying The Dip Work The Same On The S&P 500?

Yes. The S&P 500 moves up and down like QQQ, so dollar cost averaging fits it well. Single stocks do not work the same way, even when people say they do.

Watch Video: 3 Tech Stocks You'll Wish You Bought on This Dip (One Is Down 15% Today)

Video published on July 24, 2026

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The content on the website is for informational and educational purposes only. It does not constitute and should not be construed as financial or investment advice or an offer to purchase or sell securities. The content is not personalized or tailored to a specific person or group of persons, nor to their personal investment or financial needs. You should consult a financial adviser or other investment professional authorized to provide investment advice. Investing comes with risks, including the risk of loss. Presentations of trades made by Goat Academy or its personnel are not a guarantee that any investment decision made by a student will be successful. Past performance is not a guarantee of future performance.