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As Facebook and Netflix trade in bear market territory, tech investor Paul Meeks gives two tech alternatives

FANG stocks need to drop this much before tech investor Paul Meeks becomes a buyer

Facebook and Netflix – two of the hottest FANG stocks – are now trading in bear market territory after disappointing earnings over the past two weeks.

Long-time tech investor Paul Meeks has two alternatives he feels offer far better value.

"I like some of the Chinese tech names, particularly the internet leaders like Alibaba and Tencent," Meeks, chief investment officer at Sloy, Dahl, & Holst, told CNBC's "Trading Nation" on Friday. "In some cases you could say they have better growth potential than the American net leaders, and you're buying them in just a total wipeout in their stock markets."

The Shanghai Composite, China's major stock market, is in a bear market after having fallen 20 percent from a 52-week high set in January. It is now down 13 percent for the year.

Alibaba and Tencent are due to report on their quarters in August, and Meeks says it's best to wait to see their results before taking the leap.

Facebook's historic sell-off last week capsized the rest of the tech sector. Over Thursday and Friday's session, the FANG stocks – Facebook, Amazon, Netflix, and Alphabet – lost nearly $166 billion in market cap.

Even after that sell-off, the Wall Street darlings aren't cheap enough for Meeks.

"I wouldn't buy them today. I would buy them on a correction," Meeks said. A correction marks a 10 percent pullback from 52-week highs. Such a drop would put Apple and Netflix at levels not seen since the beginning of May, and Alphabet back to its early July price.

"They will have a slip up at some point and these stocks won't go down 2 percent, they'll go down 20 percent because they're volatile tech names and that's your buying opportunity," he added.

The possible exception is Facebook, which needs to offer up better incentive before Meeks feels comfortable buying the stock.

"I'll get re-interested in Facebook under two scenarios: One, some clarity around the business model or two, the stock probably has to be $10 or $15 lower than where it's currently trading to get me back in," he said.

Meeks reduced his position in Facebook when it hit the high-$170s earlier in the week. He still has a small holding.

Facebook stock ended last week around $174, roughly 20 percent lower than the all-time high set on Wednesday. The following day, the social network lost $119 billion, a Wall Street record, after warning of increased expenses on security and privacy improvements.

Veteran tech fund manager Paul Meeks reveals what would make him ‘reinterested’ in Facebook