This Dip Won’t Last – Should You Be Buying These 6 Stocks Now?

The market has been unusually volatile in 2026.

The Federal Reserve held interest rates steady during one particularly turbulent week, although three members voted for a hike. The Dow fell 1,153 points in its worst day of the year, while the Nasdaq closed 10% below its June peak, putting it into correction territory for the second time this year.

Then sentiment flipped.

Microsoft jumped 15% after what I viewed as monster earnings. The Nasdaq posted its best day since June, and subsequently reported results that sent its shares sharply higher.

To me, the important part wasn’t simply that stocks bounced. It was what investors were suddenly rewarding.

For much of 2026, the market has been worried about one thing above all else: the enormous amount of money being spent on artificial intelligence infrastructure.

I think the latest earnings reports started to answer an important question: Which companies are actually generating returns from all that spending, and which companies are simply spending?

The companies showing results were rewarded. The ones without convincing evidence of returns were punished.

And there’s another reason I think investors need to look beneath the index headlines.

The S&P 500 is only about 2% below its record high, but the damage underneath the surface is much greater. The Magnificent Seven are down as a group this year, while the other 493 stocks in the index are up about 13%.

In other words, some of the most interesting discounts are sitting among companies that investors already know extremely well.

I think that’s worth exploring.

Before I buy a stock, I want to know more than whether its price has fallen.

One of the tools I use for that process is InvestingPro from Investing.com. I particularly look at ProPicks AI and the Fair Value tool.

ProPicks AI uses more than 50 financial signals to identify stocks its model considers attractive. Once something catches my attention, I can use the broader InvestingPro data to dig into the company’s fundamentals and valuation.

That’s how Applied Materials (NASDAQ: AMAT), for example, surfaced as one of the strategy’s top picks in the analysis behind this article.

InvestingPro lets me quickly see which stocks are being flagged as undervalued, then dig into the numbers with ProPicks AI and the Fair Value tool instead of spending hours trying to piece everything together myself.

So without further ado, let’s dive into the stocks list.

Amazon is one of the two companies I put at the top of my list.

I already own it, and I think the latest earnings report made the investment case stronger rather than weaker.

Source: InvestingPro

Before the report, Amazon was about 15% below its May all-time high of roughly $278. The reason was easy to understand: spending.

Amazon had said it expected to spend about $200 billion on capital projects during the year. Investors understandably wondered whether all that money would actually produce adequate returns.

Then Amazon showed us the numbers.

Quarterly revenue came in at $200.6 billion, up 20%. AWS grew 36.7%, its fastest growth in 18 quarters. Operating income jumped 43% to $27.5 billion, while advertising revenue increased 26%.

Amazon’s CEO also said the company’s AI business and chip business had each passed a $25 billion annualized run rate, with both growing at triple-digit rates.

That’s the part I care about.

The spending isn’t simply an abstract bet on the future. Amazon is already seeing substantial demand tied to the businesses it is building.

The stock jumped more than 13% the next morning.

Even after that move, Amazon was trading at about 27 times forward earnings going into the report, below its historical average and among its cheaper valuations in years.

Source: InvestingPro

Morningstar subsequently raised its fair value estimate to $300, gave Amazon a four-star rating and maintained its wide-moat assessment.

For me, this is exactly what I want to see when I buy a dip: a world-class business, a clear reason for the market’s concern and evidence that the concern may be temporary.

If I had to choose between Amazon and Alphabet (), Alphabet is actually the one I prefer.

I’ve talked about Alphabet many times, and I’ve been dollar-cost averaging into the stock and buying it each month for roughly two years.

At around $362, Alphabet was about 14% below its May all-time high near $409.

Again, I think the market’s concern is understandable.

On July 22, Alphabet reported a monster quarter. Revenue rose 24% to $119.8 billion, but the stock still fell 7% the next day.

Source: InvestingPro

Why?

Alphabet increased its spending plan to as much as $205 billion this year, more than double what it spent the previous year. It also generated negative free cash flow for the quarter for the first time, meaning it spent more cash than it generated.

Wall Street saw that spending bill and got nervous.

I look at what that spending is buying.

Google Cloud grew 82% last quarter, with a backlog of $514 billion in signed business. That’s roughly half a trillion dollars of demand that Google has yet to deliver.

The Gemini app had reached 950 million monthly users, while Search grew 17%.

And then there’s everything else.

Waymo, Alphabet’s self-driving unit, raised money in February at a $126 billion valuation. YouTube remains a major business. Alphabet continues to invest in quantum computing and AI models.

I think the market is valuing Alphabet largely on what it is today instead of what it could become from the investments it is making today.

Morningstar gives Alphabet a four-star rating, a wide-moat classification and a fair value estimate of $433. The average analyst target cited in my research, based on 64 analysts, is around $428.

Source: InvestingPro

That is a meaningful gap from a stock price around $360.

I wanted to make sure this list wasn’t simply another collection of AI and technology stocks.

That’s why Walt Disney Company () is here.

At around $96, Disney was roughly 52% below its all-time high of just over $200 in 2021.

The market’s concerns are real.

Earlier in the fiscal year, profit in the entertainment division fell 35%, while sports profit dropped 23% in a single quarter. Disney also carries about $41 billion in net debt and has been cutting jobs.

I’m not ignoring those problems.

What interests me is that the latest quarter showed signs of stabilization. Total segment profit increased 4%, yet the stock still hasn’t received much credit for that improvement.

Source: InvestingPro

I think the market has decided that Disney’s problems are permanent and, in doing so, may be overlooking what the company still owns.

Disney has one of the most valuable collections of intellectual property in the world, alongside a theme-park business that continues to generate substantial profits.

The stock trades at roughly 13 times forward earnings.

The analyst consensus cited in the research is a strong buy, with an average target of approximately $127, about 32% above the cited share price.

Morningstar gives Disney a wide-moat rating and a fair value estimate of $125 and has described the stock as undervalued.

Source: InvestingPro

Disney’s earnings were due during the week the original analysis was recorded, so some of the near-term numbers may have changed by publication. But my broader question remains the same: are the company’s current problems permanent, or is the market pricing them as though they are?

Hershey () is another stock where I think investors need to distinguish between a difficult environment and a broken business.

At around $176, Hershey was down about 36% from its 2023 all-time high near $277.

The basic problem is cocoa.

Cocoa prices reached record levels and crushed Hershey’s margins. The market subsequently treated the situation as though the company’s long-term economics had fundamentally changed.

But the latest results gave me a reason to look more closely.

Source: InvestingPro

Hershey reported earnings of $1.90 per share against expectations of $1.42. It also beat revenue expectations and raised its full-year earnings guidance.

And yet the stock fell about 4% that day.

When a company beats expectations, raises guidance and still falls, I pay attention. Sometimes the market is telling me that expectations remain extremely low.

Management has also indicated that cocoa costs could begin moving lower in 2027.

If that happens, the exact factor that crushed Hershey’s margins could become a tailwind.

At the cited price, the stock offered a dividend yield of about 3.3%, while the average analyst target was roughly 16% above the current price.

Source: InvestingPro

I don’t think Hershey is without risk. But I do think the market may be treating a temporary commodity shock as if it were a permanent impairment of one of America’s strongest consumer brands.

Micron Technology () is one of the most interesting stocks on this list, but I would approach it very differently from Amazon or Alphabet.

The stock was trading in the mid-$800s and was down about one-third from its June all-time high of $1,255.

Source: InvestingPro

That is remarkable considering what Micron had just reported.

Revenue reached $41.5 billion, up 346% year over year. Earnings came in at $25.11 per share, gross margin reached 85%, and management guided the next quarter to roughly $50 billion in revenue.

Even more importantly, Micron’s high-bandwidth memory, or HBM, which AI data centers rely on, was described as sold out through the end of 2027.

So why was the stock falling?

China.

Chinese memory manufacturer CXMT went public and rose roughly five times on its debut. Investors immediately started worrying that lower-cost Chinese memory products could eventually challenge Micron.

There’s another problem I can’t ignore: memory is cyclical.

When prices become extremely high, producers have an incentive to increase supply. Eventually, oversupply can crush margins.

Micron fell from $990 on July 23 to $739 by Wednesday’s close, losing more than 25% in four trading days.

Then the market got another piece of information.

Amazon raised its spending plan to around $220 billion and said higher memory costs were contributing to that increase. ’s CEO described the memory-pricing environment as a “100-year flood.”

To me, that’s evidence of pricing power.

When some of the world’s biggest technology companies are complaining about how expensive your product has become, that’s not necessarily bad news for the supplier.

Micron subsequently bounced as much as 26% from Wednesday’s low at the morning high, although it gave some of those gains back.

The stock trades at about six times next year’s expected earnings, while the average analyst target across 45 analysts is around $1,500.

Source: InvestingPro

But I would not mistake that low multiple for a risk-free opportunity.

A cheap valuation based on record earnings is exactly what a cyclical peak can look like. The China threat is also real, even if Chinese technology is currently estimated to be two to three generations behind Micron.

For me, Micron belongs in the higher-risk portion of a portfolio. The upside could be significant, but I would size the position accordingly.

SoFi Technologies () is the stock on this list where I see the biggest discount and the biggest risk.

At around $17, it was approximately 50% below its all-time high.

What makes that particularly interesting is that the business itself appears to be performing extremely well.

SoFi reported record quarterly revenue of $1.2 billion, up 43% year over year. Membership reached 15.8 million, up 35%.

Source: InvestingPro

Loan volume increased 69%. Deposits reached $45.5 billion.

And SoFi generated $156.6 million in net income.

This isn’t a pre-profit story stock anymore.

So why has the stock been cut in half?

Expectations.

SoFi was priced for near-perfect execution last November, and 2026 has been a long reset in those expectations.

After its latest earnings report, the stock dropped about 9% to a 52-week low because SoFi raised its revenue outlook without raising its profit outlook.

The following day, it bounced 8%.

That kind of whipsaw tells me exactly what I’m buying: a high-growth company whose valuation the market still can’t agree on.

Source: InvestingPro

SoFi trades at roughly 22 times forward earnings while guiding to more than 30% growth.

Morningstar raised its fair value estimate to $17.50 on the day of the earnings report and described the stock as modestly undervalued. The average analyst target cited is approximately $19.87.

But this is where I want to be especially clear about the risk.

Most analysts currently rate SoFi closer to a hold than a buy. Its technology platform declined about 23% last quarter after losing a major client in 2025.

Most of its lending is in personal loans, which can be particularly vulnerable if consumers weaken.

The stock also has more than twice the volatility of the broader market.

I’ve been buying SoFi for years, including during the latest dip. But that doesn’t mean I think everyone should own it in the same size as Amazon or Alphabet.

If I own it, I want it in the small, high-risk portion of my portfolio. money I can afford to be wrong on.

This is the part I think matters most.

I don’t simply buy a stock because it’s down 30%, 40%, or 50%.

I want to know why it’s down.

I think about these six companies as a risk pyramid.

At the base are Amazon and Alphabet. the quality compounders.

They’re highly profitable, have strong competitive advantages, and are being pressured by investor concerns about enormous spending. But their latest results are beginning to show that the spending is producing real demand and revenue.

That’s where I would put the largest portion of my dip-buying capital.

The next tier is Disney and Hershey.

These are established companies outside technology with powerful brands, real problems and potentially temporary headwinds.

I need higher conviction here because the problems are more directly connected to their businesses. But if I’m being paid a dividend while I wait, that’s an additional benefit.

Then there’s Micron.

I see enormous demand and an attractive valuation, but I also see cyclical risk and the possibility that the stock could fall further before the next sustained move higher.

At the very top of the pyramid is SoFi.

It’s the smallest allocation for me because it’s the highest-risk name. The growth is impressive, but the volatility and uncertainty around valuation are significant.

This is the most important rule.

A discount means the business is still great and the fear is temporary.

If the business itself is broken, that’s not a sale. It’s a potential value trap.

I don’t try to catch the exact bottom because I don’t think anyone can consistently do it.

Amazon is a perfect example. It was about 15% below its high going into earnings, and then recovered much of that discount almost overnight.

I would rather dollar-cost average into a company I believe in than bet everything on a single entry point.

The riskier the stock, the smaller I want the position to be.

That’s how I can participate in the upside without allowing one speculative investment to derail my portfolio.

When I look at these six stocks, I don’t see six identical opportunities.

I see six different versions of the same question: has the market overreacted to a temporary problem, or has it correctly identified a permanent deterioration?

Amazon and Alphabet are the two I have the highest conviction in. Disney and Hershey interest me because I think their current problems may prove more temporary than the market believes.

Micron is a much more volatile opportunity where the AI demand story is compelling, but the memory cycle and China introduce serious risks.

SoFi is the speculative bet. The growth is real, but so is the risk.

For me, the lesson is simple.

I don’t want to buy stocks just because they’re cheap. I want to buy great businesses when the market gives me a reason to question them ? and then determine whether that reason actually changes the long-term investment thesis.

That’s where I think the best opportunities can appear.

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Disclaimer: This article is for informational purposes only and is not financial, legal, or investment advice. “Investing Simplified – Professor G” is owned by NGFINCO, LLC. Always do your own research and consult a licensed professional. We are not responsible for any losses or decisions made based on this content.