3 Top Technology Stocks to Buy in May

Yahoo

04-05-2025

Alphabet's core and emerging business units are thriving.
The Trade Desk trades at its lowest valuation since 2019.
Cybersecurity remains a top priority for many organizations.
April wasn't an enjoyable month for investors. The stock market became a roller coaster, marked by stomach-churning volatility with prices plummeting one day and soaring the next. While the Nasdaq Composite bounced off its recent lows, there are still a handful of hot deals on top-tier technology stocks.
Three Fools got together to identify which names investors should focus on in May.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), The Trade Desk (NASDAQ: TTD), and CrowdStrike Holdings (NASDAQ: CRWD) stood out from the crowd.
Here is what makes each stock a table-pounding buy.
(Alphabet): Google's parent company is working through some adversity. The technology behemoth lost two antitrust lawsuits, and investors fear that the increasing popularity of artificial intelligence-powered chatbots, such as ChatGPT, could erode Google's search engine dominance. As a result, Alphabet stock declined by 23% from its high.
If you were looking for reasons to buy the dip on Alphabet, recent first-quarter 2025 earnings gave you several.
Start with Google Search, which grew advertising revenue by 10% year over year. There's no doubt that AI is becoming increasingly prevalent. But remember, Alphabet is integrating its own AI into Search, including AI Overviews, which now has over 1.5 billion monthly active users.
Next is Google Cloud, core to the company's AI plans. Google Cloud revenue increased 28% year over year, and its profitability is soaring. Google Cloud's operating income surpassed $2.1 billion in Q1, compared to just $900 million in the same quarter a year ago. Management also noted that it continues to struggle keeping up with demand, which bodes well for cloud growth.
Lastly, there's the impressive progress of Waymo, Alphabet's self-driving ride-hailing business. Waymo is performing over 250,000 weekly paid rides, up fivefold from just a year ago. I'd bet most investors think of Tesla first when they think about self-driving vehicles, yet Waymo, not Tesla, currently has a functioning service.
All this comes wrapped in a business that analysts estimate will grow earnings by an average of 16% annually over the long term, and that trades at a price-to-earnings ratio of under 18. I'm struggling to see a better mix of quality, growth, and value than what Alphabet offers today.
Will Healy (The Trade Desk): My choice for stocks to buy in May is The Trade Desk.
The Trade Desk has attracted interest for its ability to manage digital ad campaigns. Since it is not an advertiser like one of its prominent competitors, Google parent Alphabet, it holds a competitive advantage by not having an implicit bias for one platform.
It has leveraged artificial intelligence (AI) through Kokai, which can analyze vast amounts of data to optimize ad slot selection and timing. That allows marketers to maximize returns on their ad campaigns.
Still, despite those strengths, The Trade Desk may seem like the last tech stock one would want to buy at first glance. That's because it was the worst-performing tech stock in the S&P 500 in Q1 2025, even surpassing Tesla's decline in percentage terms.
Investors appeared to lose confidence in the stock when it reported its fourth-quarter 2024 results, missing its own revenue number. This occurred after dozens of quarters of topping such forecasts, leading to the stock losing one-third of its value in a single trading session.
Additionally, its Q1 revenue forecast of $575 million would mean a 17% yearly revenue growth rate, pointing to a slowdown that could further dampen enthusiasm for the stock. In comparison, revenue grew by 22% in Q4 despite the miss, and by 26% in 2024.
Nonetheless, when it reports its Q1 results on May 8, it's likely to return to its past track record of beating its estimates, rather than falling short. That could help rebuild investor confidence in this stock.
Moreover, its stock has fallen by over 60% since December. As a result, its price-to-earnings ratio has dropped to 68, its lowest level since 2019 and down from an earnings multiple above 225 in December. That's a compelling motivation to overlook the slowdown in revenue growth.
Finally, Alphabet is under increasing fire since a district court ruled that it holds a digital advertising monopoly. That opportunity could be a chance for The Trade Desk to widen its competitive moat, a factor that could easily boost the company's stock price.
Jake Lerch (CrowdStrike Holdings): My choice is CrowdStrike Holdings.
With so much uncertainty in the market, it's essential to identify stocks that are continuing to show strength. That's one of the reasons I like CrowdStrike. The company, which develops AI-powered cybersecurity solutions, is more or less immune to two of the biggest questions plaguing the stock market right now.
The first is trade and tariffs, which are creating an overhang for companies that rely on international trade. Only one-third of CrowdStrike's revenue comes from international markets. More to the point, the company generates revenue by selling subscriptions to its security modules. As a result, it's unlikely that CrowdStrike will face much effect from the ongoing trade negotiations.
Second, there are growing fears that data center spending could slow down. That's weighed on the large cloud service providers (like Microsoft, Amazon, and Alphabet) and the companies that rely on selling materials for data centers (like Nvidia). However, CrowdStrike doesn't fall into either of those two categories.
It provides cybersecurity for organizations, and there's no sign that cybersecurity spending will be dropping off any time soon. CrowdStrike averaged 40% revenue growth over the last three years. While that figure has now dropped to 25% in its most recent quarter (for the three months ending on Jan. 31, 2025), it's still a rapid pace.
Cybersecurity remains a must-have service at just about every organization -- no one wants to see their data or systems compromised. As a result, I think CrowdStrike will continue to outperform in a market that's still trying to find its footing in 2025.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Alphabet, Amazon, CrowdStrike, Nvidia, Tesla, and The Trade Desk. Justin Pope has no position in any of the stocks mentioned. Will Healy has positions in CrowdStrike and The Trade Desk. The Motley Fool has positions in and recommends Alphabet, Amazon, CrowdStrike, Microsoft, Nvidia, Tesla, and The Trade Desk. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
3 Top Technology Stocks to Buy in May was originally published by The Motley Fool