You’ve surely heard the adage, “sell in May and go away.” While this investing trope is popular for investors who believe that the summer season is commonly a down time for stocks, it doesn’t hold true for the best stocks in the market. Buying A-rated stocks for May makes a lot of sense for several reasons.
The end of tax season can often lead to increased consumer spending and investment, which can boost stocks in the technology and consumer discretionary sectors. In addition, many companies have reported their first-quarter earnings reports and issued guidance for the rest of the year, which gives investors some additional information when chasing A-rated stocks for May.
Suggestions that investors should avoid the market in May can lead to expensive mistakes. You would miss out on any gains that stocks generate in the summer. And nothing would spoil a week on the beach more than leaving returns on the table.
Instead, I suggest using the Portfolio Grader to identify A-rated stocks for May. By evaluating stocks based on growth, earnings performance, momentum and other factors, the Portfolio Grader gives you the best opportunity to avoid the summer doldrums and keep your portfolio moving higher.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) continues its run as one of my top stocks to own. The semiconductor powerhouse is on the road to recovery from its April dip and is again topping the $900 price point.
Nvidia is a powerhouse because it has roughly a 90% market share in supplying the high-powered graphics processing units (GPUs) that are needed to power the most advanced generative artificial intelligence and machine learning applications. That’s why NVDA stock jumped nearly 240% in 2023, and why the company now sports a market capitalization of more than $2 trillion.
Anticipation is already building toward Nvidia’s earnings report for fiscal 2025, which is scheduled to be issued May 22. While recent weeks brought some bearish sentiment that Nvidia would be unable to maintain its growth trajectory, earnings reports from Nvidia’s top customers indicate that the company is likely looking at another robust report.
NVDA stock is up 82% in 2024 and gets an “A” rating in the Portfolio Grader.
Palantir Technologies (PLTR)
It seems as if Nvidia and Palantir Technologies (NYSE:PLTR) are joined at the hip. Not because they are companies that rely on each other, but because they are two of the hottest AI companies on the planet in recent quarters.
Palantir is a top contractor to governments and intelligence agencies, where it can use its AI-powered platforms to provide real-time information and predictions to military units in the field.
But it also has a fast-growing commercial unit that is making valuable insights available to nonmilitary clients as well. Its partnership with Oracle (NYSE:ORCL) will allow Palantir to make its Gotham and Artificial Intelligence Platform available to commercial clients through Oracle’s cloud network.
Earnings for the first quarter showed $634.3 million in revenue, an increase from 21% from a year ago. Palantir projects revenue in the range of $649 million to $653 million for the second quarter and increased its full-year revenue guidance to a range of $2.677 billion and $2.689 billion.
While some bears are disappointed that Palantir isn’t growing as fast as they would like, the stock’s post-earnings slump is a valuable buying opportunity for a company that’s just going to improve. PLTR stock is up 21% this year and gets an “A” rating in the Portfolio Grader.
Alphabet (GOOG)
Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) is one of the most well-known companies on the planet. The company’s search engine, Google, has a 91% share of global search traffic, and its Chrome browser has a 65% market share. Its YouTube platform is the world’s second-most popular video streaming service.
Combined, those properties gives Alphabet a powerful position on the internet to target advertisers and push extensions that highlight Alphabet products.
GOOG stock jumped to all-time highs after the company reported first-quarter earnings of $80.5 billion, up 15% from a year ago and ahead of analyst consensus of $78.6 billion. Earnings per share was $1.89, beating consensus estimates of $1.51 per share and topping last year’s earnings by 61%.
Google Cloud’s revenue increased 28% from a year ago and operating earnings surged more than fourfold compared to Q1 2023. Alphabet also announced plans to add $70 billion to its share repurchase program and to start paying a quarterly cash dividend.
GOOG stock is a powerhouse, up 22% in 2024. It gets an “A” rating in the Portfolio Grader.
Super Micro Computer (SMCI)
There are some interesting opportunities right now for investors of Super Micro Computer (NASDAQ:SMCI). The stock had massive gains in 2023 and the first quarter of this year, but also slipped by nearly 30% in the last month as bears worried that the stock grew too much, too quickly.
Count me among the bulls, however. I think this is a rare buying opportunity to get a powerful stock at a massive discount.
Super Micro Computer works closely with chip manufacturers like Nvidia to design server racks and storage clusters that are needed for companies that use Nvidia’s GPUs to power their AI products. It has more than 1,000 customers for its high-end servers that are helping to make machine learning, AI and quantum computing possible.
KeyBanc Capital Market analyst Tom Blakely estimates that Super Micro currently has 6% of the server infrastructure market and a 10% share of the AI server segment. He believes that the company’s AI position can grow to 23% by the end of this year.
Earnings for the company’s fiscal third quarter included revenue of $3.85 billion, up from $1.28 billion a year ago. Income of $402 million was up from $86 million a year ago.
Even when the slip in stock price in the last two months, SMCI stock is up 188% this year. It continues to get an “A” rating in the Portfolio Grader.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) is another blue-chip tech stock. The operator of the Facebook, Instagram, Messenger, Threads, and WhatsApp products, Meta includes roughly half the global population as monthly active users.
Meta is doubling down on its AI and machine learning efforts to optimize its valuable advertising platforms and improve user experience.
Meta Platforms CEO Mark Zuckerberg describes the company’s newly upgraded Meta AI chatbot as “now the most intelligent AI assistant that you can freely use.” The AI-assistant software can create images and animations available on Facebook, Messenger, Instagram and WhatsApp.
Meta also recently introduced Llama 3, an large language model that’s already getting rave reviews compared to its rivals LLM products.
Earnings for the first quarter included $36.4 billion in revenue, up 27% from a year ago. Income was $12.3 billion, up 117%, and earnings per share of $4.71 was up 114% from a year ago.
META stock is up 32% this year and gets an “A” rating in the Portfolio Grader.
Trump Media & Technology Group (DJT)
First, let’s get something straight. You don’t have to like the politics of former President Donald Trump to buy or sell Trump Media & Technology (NASDAQ:DJT) stock.
Truth be told, Trump Media stock is a meme play, with the underlying fundamentals of Trump Media and its Truth Social platform unable to support the company’s current stock price.
But you can still make a profit from DJT stock. You just have to ignore the chatter and drama.
First, remember that Truth Social is positioning itself as a platform to amplify suppressed or silenced voices and viewpoints. It may also grow in popularity as X, the company formerly known as Twitter and now operated by Elon Musk, is considering charging new users a fee to post and respond to posts.
Truth Social is also planning to launch a live TV streaming platform that could help it reach a wider audience.
There are growing reports about growing short interest of DJT stock and the possibility of a short squeeze. I don’t think that’s a good idea to get involved with, but if you think that Truth Social will grow and be a competitor to X, then a small investment in DJT stock may make sense.
Trump Media stock is up 17% in the last month and gets an “A” rating in the Portfolio Grader.
Shell (SHEL)
Shell (NYSE:SHEL) is a British oil and gas exploration company. It has a large footprint in the U.S., where it operates in all 50 states and has over 12,000 gas stations and convenience stores.
It’s also investing heavily into electric vehicle infrastructure, with plans to increase the number of EV charging stations it operates from 54,000 to 200,000 by 2030.
Earnings for the first quarter were $7.7 billion, which was solid, but down from $9.6 billion a year ago because of falling gas prices. But with oil prices up 10% from a year ago, those numbers will improve as the price of oil goes up.
Shell also takes care of its shareholders. The company is instituting a share buyback program of $3.5 billion, which is expected to be completed over the next three months. And it already pays a dividend yield of 3.7%.
SHEL stock is up 11% this year and gets an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in NVDA, PLTR, SMCI and SHEL. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article had a long position in NVDA, PLTR and SMCI. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
Technology, Artificial Intelligence, Cloud, Cybersecurity, Energy, Oil, Communications, Media, Social Media, Software, Streaming
