I prep in three distinct ways - big picture prep, location prep, and session prep. It sounds like you are talking more about session prepping, let me touch on the other two lightly and then drill down into that. One note is that I am 100% homebrew world and adventures.
Big picture is mostly idly musing during my day about things, about what the character are doing and repercussions - good and bad, and what is dynamic that they are not touching. What things are the players showing the most interest in so I can focus on them. How to weave character backstory into what's going on. This is the basis for all of the high level design, grows often, shifts occasionally*, and helps me improv when they go in directions I didn't expect.
* I practice Schrodinger's Plots: Nothing is true until it hits the table. So I can change details I had previously thought about, as long as it doesn't require any retconning. Things will evolve over the course of the campaign.
Location prep is for things like a city I expect them to spend a lot of time in. I'll determine why the city was founded there, who lives in it now and what factions might have over/hidden control or presence there. This gives me the powers-that-be and a broad overview. I will often use a random generator to come up with a map, which I'll break into districts. Each district I'll detail the general feel and what's in it, then bullet point out three NPCs the players might be interested in or vice versa, and a short list of street color to throw in as they move around. I keep it short and sweet with lots of "blanks" on the map to fill in for adventure or character needs. I don't want to detail everything - players don't interact with settlements the same way they do with dungeons, I don't need a list of all the shops on a particular street.
Onto session prep. I keep a separate Google Doc for each session prep, copied from the last.
First page has a list of important things for each of my PCs. Affiliations/enemies, important skills and features. This gives me inspiration whenever I'm stuck looking for the next piece - who hasn't shown up in a while, what characters need some more spotlight time, what features have they invested in that I've ignored recently that they can show off.
I find that I tend to prep for a bit more than my players can accomplish in a session, so I may have a lot of this session already ready from last session. I also will prep at least nubs for other likely ways the characters will go and other hooks I've put in front of them, so if they are picking up a thread that I detailed earlier I also have a good start, though it may need to be updated based on time passing.
For any game that I have electronic access to statblock or the equivalent, I copy any expected into my notes so I don't have to look anything up. I bought a Brother B&W duplex laser printer years ago and it's very cheap to print a page, unlike inkjets. So I don't mind having a few extra. And now that everything is online, it's even easier.
I work up what I expect they may come across, trying to make sure to have a variety of different challenge types. Between the Five Room Dungeon concept and my list of "they invested in this and it hasn't come up in a while list" I have a good idea of types of challenges, and between the plot(s) they are currently doing plus any side plots from character arcs or enemies/allies list, I figure out what they might come across.
Oh, I realized I have another type of prep. Improv prep. I have lists of potential NPC names, broken up by culture and then gender/caste/whatever. When I need an name, I just take the top one, and then make notes who they are. For playing in person I printed out a mess of wallet-sized photos of character/NPC portraits that I have collected off the internet. When I need an unexpected NPC with some depth, I grab a handful of these and pick whichever seems the best. But because I intentionally only choose a handful to sort through, not only is it quick, but it's often a quirky fit which helps make memorable NPCs. "Why is the alchemist wearing a pirate's hat, we're a week march inland?" Or the campaign where every picture for halflings I drew at different times were judging disapprovingly and it ended up flavoring how I played all of the halflings in that world.