November Is Historically the Best Month for the Stock Market. Here Are My Best 3 Stocks to Buy.

If you're thinking about sitting out the stock market in November due to concerns like the election, the status of the Iran war, or any other item, don't. History is not on your side. Research from The Motley Fool shows that November is the best month of the year for the S&P 500. It averages around a 1.9% gain in November, beating out April's and December's 1.4% gain. There's a midterm or regular election cycle in half of those years, so it's clear that this isn't an effect investors need to consider.

With November being the best month to invest in historically, what are the three best stocks to buy? Well, I think Nvidia (NASDAQ: NVDA), Micron Technology (NASDAQ: MU), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) top the list, and each looks pretty attractive right now.

Image source: Getty Images.

Nvidia

Nvidia is the world's largest company, so it may seem odd to think it can get bigger. But that's what all the projections point to. Nvidia posted monster 106% revenue growth in the second quarter, and Wall Street analysts expect 91% growth in Q3 and 83% in Q4. Next year, Nvidia expects 70% revenue growth, clearly indicating that the AI build-out is going as strong as ever.

There are no signs of weakness in Nvidia's business; however, the stock has been fairly weak this year. As a result of strong business growth and weak stock gains, the stock is pretty attractively priced right now.

NVDA PE Ratio (Forward 1y) data by YCharts

With Nvidia at 27 times earnings and 13.4 times next year's earnings, it's clear that next year's growth hasn't been priced into the stock. In fact, if Nvidia hits analyst estimates and maintains its 27 price-to-earnings ratio, the stock could double over the next year. The market doesn't quite realize this yet, but it could in November.

Micron

Micron is in a similar boat as Nvidia. It makes memory chips, which are in huge demand and short supply thanks to insatiable AI workloads. Micron's results are even more extreme than Nvidia's. Micron's fiscal year ends in August, so it's already in its 2027 fiscal year. Wall Street analysts expect Micron to grow at a 107% rate this year, although it's not an easy company to predict growth for.

Memory chip pricing is largely driven by market demand, and with conditions expected to worsen in 2027 and 2028, prices could continue to rise. That would mean a faster growth rate than Wall Street projects, which could further exaggerate how cheap Micron's stock is.

The stock trades for just 5.3 times this year's earnings, which means a massive gain could be in store if the market comes back around to Micron's stock.

Alphabet

Last on my list is Alphabet. Alphabet is a staple in the AI world, but the market didn't take kindly to its latest earnings report. Investors sold off the stock by over 10% the day after earnings due to negative cash flow. This is a sign that Alphabet is spending more than it brings in, but it's doing it for a reason.

Alphabet's cloud computing division, Google Cloud, grew at a 103% pace during Q3, a simply incredible rate. This division is one of the biggest beneficiaries of the AI build-out, as it runs workloads for several major clients. Alphabet is spending big to continue boosting its cloud revenue, and with that revenue growing as fast as it is, this spending makes a ton of sense. I'm not as worried as the market is, as the company's long-term financial picture supports this major spending.

As a result, I think Alphabet is a smart stock to buy on the dip in November.

Keithen Drury has positions in Alphabet, Micron Technology, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Micron Technology, and Nvidia. The Motley Fool has a disclosure policy.