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5 Top Stocks to Buy in May 2025: Navigating Volatility with Growth and Dividends

Edwin FosterSunday, May 4, 2025 6:09 am ET

140min read

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The stock market in 2025 has been marked by turbulence, driven by tariff policy uncertainty, sector-specific challenges, and shifting investor sentiment. Yet, within this volatility, certain companies have emerged as compelling opportunities for growth and income. Based on recent financial performance, analyst consensus, and strategic positioning, here are five stocks to consider purchasing in May 2025.

1. Walmart Inc. (WMT): The Defensive Titan

Walmart stands out as a recession-resistant stalwart, leveraging its dominance in consumer staples and e-commerce. The company’s Q4 2024 results highlighted a 3% rise in store traffic and a 16% jump in e-commerce sales, fueled by AI-driven supply chain efficiencies. Its plan to expand same-day delivery to 95% of U.S. households by late 2025 underscores its commitment to modernizing retail.

Why Buy Now?
- A 13% dividend hike in 2025—the largest in over a decade—provides a 1.23% yield.
- Operating profit rose 8% in 2024, outpacing revenue growth, signaling robust cost management.
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2. Micron Technology Inc. (MU): The AI Hardware Leader

Micron is a critical player in the AI revolution, supplying high-bandwidth memory (HBM) chips for data centers and AI accelerators. With trading multiples at just 7x forward earnings—a deep discount to its peers—this semiconductor giant offers value amid its growth trajectory.

Why Buy Now?
- CEO Sanjay Mehrotra emphasized Micron’s products are “more firmly entrenched in customers’ roadmaps” for AI infrastructure.
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- Analysts project Micron could capture a $100 billion AI hardware market, with demand for low-power memory chips driving multi-year growth.

3. Starbucks Corporation (SBUX): A Turnaround Play

Starbucks’ recent struggles—Q2 2025 EPS fell 40%—have created a valuation opportunity for patient investors. While North American sales dipped 1%, the company’s focus on operational improvements (e.g., menu simplification, store rebranding) and a 3% dividend yield position it for recovery.

Why Buy Now?
- China sales stabilized after years of decline, and the brand’s global equity remains strong.
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- A 30% drop from its 2023 peak has priced in near-term risks, making it a buy for long-term growth.

4. NextEra Energy Inc. (NEE): The Renewable Energy Giant

NextEra combines the stability of a regulated utility (Florida Power & Light) with the growth of renewables. Its 28 GW renewable energy backlog—expanding to 70 GW by 2027—aligns with federal clean energy incentives, ensuring recession-resistant cash flows.

Why Buy Now?
- Q1 2025 adjusted EPS rose 9%, and dividends are projected to grow 10% annually through 2026.
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- A 3.4% dividend yield and defensive utility profile make it a must-own energy stock.

5. Enbridge Inc. (ENB): The High-Yield Infrastructure Bet

Enbridge delivers income stability with a 5.8% dividend yield—the highest among the recommendations—and exposure to both traditional energy and renewables. Its expansion into wind/solar projects and liquids pipelines positions it for long-term growth.

Why Buy Now?
- 19 years of consistent financial guidance and a 30-year dividend growth streak.
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- The stock’s 10% rise in early 2025 reflects investor confidence in its diversified infrastructure model.

Key Risks and Considerations

Trade Policy Uncertainty: President Trump’s tariff proposals threaten export-reliant firms like Micron and Walmart.
Sector-Specific Challenges: Starbucks’ recovery hinges on execution, while Micron faces near-term semiconductor oversupply.
Market Volatility: The S&P 500’s 23% surge in 2024 has created uneven performance; investors should avoid overconcentration.

Conclusion: Balance Growth with Defensive Strength

The top five stocks for May 2025—Walmart, Micron, Starbucks, NextEra, and Enbridge—offer a mix of dividend stability, AI-driven innovation, and renewable energy growth. While Micron and Starbucks present value opportunities, NextEra and Enbridge provide recession resilience.

Investors should pair these picks with broad exposure via S&P 500 index funds (e.g., SPY or IVV), which have delivered ~10% annual returns historically. As the market navigates tariff risks and sector shifts, prioritizing companies with strong fundamentals and strategic vision—like those highlighted—will be critical.

In a year where the S&P 500 has seen mixed performance, these five stocks stand out as prudent choices for both income and growth.

Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.