2 Semiconductor Stocks to Own in May

Semiconductor stocks have been surging this spring, as the AI boom stays strong in the face of geopolitical pressures. This past April was one of the best months yet for the sector, with the VanEck Semiconductor ETF (SMH) marking its largest monthly percentage gain ever at 32.2%. The sector's run could still have energy in reserve, too, as chip stocks have tended to outperform in May, historically. 

Looking at Schaeffer's Senior Quantitative Analyst Rocky White's list of the best S&P 500 (SPX) stocks to own in May over the last 10 years, 13 of the 25 on the list can be categorized as semiconductor stocks. Right below Nvidia (NVDA), Broadcom Inc (NASDAQ:AVGO) and Applied Materials Inc (NASDAQ:AMAT) are both high on the list -- finishing the month positive 90% of the time with an average 7.6% gain.

Broadcom stock was last seen down 2.1% at $412.37 today, still relatively close to its April 23 record high of $429.31. Since the start of the year, the shares are up 19%. Notably, AVGO options are at reasonable prices at the moment, per its Schaeffer's Volatility Index (SVI) of 42% ranks in the low 4th percentile of its annual range. 

Applied Materials stock is trading at $390.82, not too far from its April 24 record high of $420.50. Since the start of the year, the equity is up 52%, with a floor of support emerging at $377. AMAT has tended to outperform options traders' volatility expectations over the past year, per its Schaeffer's Volatility Scorecard (SVS) of 92 out of 100.