Key Points
May is here, and the notion of "sell in May and go away" seems wrong this year. The market is full of fantastic values, and depending on how tariffs shake out over the next few months, there could be a stock market resurgence, depending on what deals are announced.
There are four stocks that top my best buys list, and I think each one is well-positioned to succeed over the long term, regardless of what happens over the next few months.
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Nvidia
It shouldn't surprise anyone that I'm including Nvidia (NASDAQ: NVDA) on this list. The company's graphics processing units ( GPUs ) are powering the artificial intelligence (AI) arms race. Although investors seemed at the moment to have lost interest in this generational shift in favor of focusing on tariffs, Nvidia is still slated to see monster growth this year.
Wall Street analysts project 54% revenue growth for Fiscal 2026 (ending January 2026) and 23% growth in fiscal 2027. However, it could be well above those growth numbers if the data center market grows quickly.
In 2024, data center capital expenditures (capex) rose to around $400 billion, but Nvidia projects data center capex will rise to $1 trillion by 2028. Considering that Nvidia generated around $115 billion from data centers over the past 12 months, this would indicate monster growth for the company over the next few years.
Despite this rosy picture, Nvidia's stock trades at just shy of 25 times forward earnings, which is near the cheapest it has been in some time. As a result, I think it's an excellent stock to scoop up in May, especially before it reports Q1 earnings later in the month.
Alphabet
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) has already released Q1 earnings, and management was mostly upbeat about the company's prospects. While they acknowledged that tariffs will cause some headwinds, they still feel great about the general business direction and how the company is integrating various AI features.
However, all of that is overshadowed by the effects a trade war could have on the company, as well as its two court cases. Both ruled that Alphabet has operated two illegal monopolies, one with its search engine and the other with its advertising business. Both of these could be long-term headwinds, but it's still a long way away from knowing the final outcome because this case will undoubtedly end up at the Supreme Court.
In the meantime, Alphabet's stock is dirt cheap, trading around 16.7 times forward earnings, far cheaper than the S&P 500 's 20.5 times forward earnings valuation. Alphabet's stock is almost too cheap to ignore here, as investors have already priced in a worst-case scenario for the company.
Taiwan Semiconductor
Taiwan Semiconductor Manufacturing (NYSE: TSM) is one of the hidden beneficiaries of an AI boom as it makes chips for nearly every major player in that industry. Companies like Nvidia don't have the ability to manufacture chips themselves, so they outsource that work to a foundry like TSMC.
During its Q1 conference call, TSMC acknowledged that tariffs carry risks and uncertainty, but it stated it hasn't felt any impact and reaffirmed revenue guidance for 2025, which is expected to grow at a mid-20% rate. That growth is just part of a larger long-term trend, where TSMC expects to increase revenue at about a 20% compound annual growth rate (CAGR) over the next five years.
Despite that strong outlook, TSMC's stock trades for a mere 17.8 times forward earnings. That's a pretty cheap price historically. Investors should use May to pick up some shares of this long-term winner.
MercadoLibre
If avoiding tariffs and related factors isn't addressed in your portfolio, I suggest scooping up some shares of MercadoLibre (NASDAQ: MELI) . The company is the dominant e-commerce giant in Latin America and also includes a fintech wing. It's as if you combined PayPal and Amazon into a single business.
This dominant company has consistently grown revenue and earnings over the past few years and is relatively immune to U.S. decisions because its business is focused on Latin America, despite being listed on a U.S. stock exchange.
This strong growth is expected to continue in the foreseeable future because Latin America is much further behind the e-commerce buildout than the U.S. As a result, I think it's an excellent stock to buy now as it provides a safe haven for investors to access a strong and growing company without being affected by tariff decisions.
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