3 Top Stocks to Buy in May

Over the past few weeks, many artificial intelligence (AI) companies have reported strong growth, fueling renewed confidence and market highs. The S&P 500 is 8% as of this writing.

If you're looking for excellent stocks to add to your portfolio to ride the wave higher, I recommend Taiwan Semiconductor Manufacturing (NYSE: TSM), Amazon (NASDAQ: AMZN), and Lemonade (NYSE: LMND). They all feature strong AI components, and they also have excellent long-term prospects beyond current trends.

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1. Taiwan Semiconductor

Taiwan Semiconductor, or TMSC, has been reporting fantastic results in a pattern that should make every investor look twice. The chip manufacturer is a partner to most of the major global tech companies, and today it plays a major role in AI development. Every chip company or tech company that's demonstrating strong growth points to continued momentum for TSMC.

Its earnings reports typically precede those of other tech companies and are a good signal of what's to come. In the 2026 first quarter, revenue increased 41% year over year, and gross margin expanded 7.4 percentage points to 66.2%. That's more like a service company, even though TSMC makes hardware. Operating margin was 58.1%, 9.6 percentage points higher than last year.

AI is its strongest growth driver right now. It's part of the high-performance computing segment, which was up 20% quarter over quarter and accounted for 61% of total revenue. As hyperscalers continue to build out and spend, Taiwan Semiconductor will get a piece of the action.

For the second quarter, management is projecting a 35% year-over-year increase in revenue, a 66% gross margin, and a 57.5% operating margin. Although that's a confidence-boosting outlook, it warned that the second half of the year would be tougher. It's dealing with increased prices and its own expansion efforts, including its new U.S.-based facilities. However, it expects the expansion to help it meet soaring demand.

TSMC stock should keep rising alongside AI, which is why it's a great time to buy.

2. Amazon

Amazon just reported outstanding first-quarter results with accelerated revenue growth, particularly in Amazon Web Services (AWS). CEO Andy Jassy's reassurance that its spend will pay off is happening, and his belief that customer spend will shift to the cloud seems to be coming true.

There was tremendous growth all over AWS and the AI platform. AWS continues to sign new deals with high-profile clients like U.S. Bank, AT&T, and Bloomberg, and Jassy said that clients engaging with AI through AWS are also spending more on core cloud services.

AI was the showstopper in the report, with triple-digit revenue growth and a plethora of high-value services. The chips business alone has a $20 billion run rate, and it's a complete stand-alone, serving many other companies besides Amazon.

The e-commerce business is also in excellent shape, and Amazon is reaching more customers with same-day shipping. It keeps getting faster, and it can now ship more than 90,000 items to customers in 2,000 cities within three hours.

The ad business is also demonstrating phenomenal performance, with AI leading to improved results and targeted campaigns, and sales were up 24% year over year.

While there were many other excellent updates, one notable one is the development of Amazon Leo, its satellite broadband business that is just getting ready for launch. Amazon is back on the upswing, and you can still get in for the ride.

3. Lemonade

Lemonade is an AI insurance disruptor that's growing by leaps and bounds. Although it's still a tiny outfit compared with the huge, legacy insurance companies, it presents a clear threat through its digital-native platform.

Customers are already sensing it, and they continue to join at a rapid pace. In the first quarter, in-force premium (IFP), the insurance company's top-line metric, increased 32% year over year, a trend of acceleration that's been ongoing for seven quarters.

The company touts its AI and machine learning algorithms that drive efficiency, so as IFP grows, spending has been roughly flat. That's been leading to improved profitability. And although it's still reporting losses, management is guiding for positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by the end of this year and positive net income next year.

Lemonade is the only stock on this list that hasn't been getting market love lately, but that just gives smart investors an opportunity to buy more stock before it soars again.

Jennifer Saibil has positions in Lemonade and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Amazon, Lemonade, Taiwan Semiconductor Manufacturing, and U.S. Bancorp. The Motley Fool has a disclosure policy.