3 tech stocks to buy for exposure to emerging markets

Even after the recent mini-banking crisis, investments in emerging markets are about to to “perform well in the coming years,” said TD Securities analyst Mitul Kotecha. CNBC March 20th. “Even this year, once we get through this shock, our assumption is that the dollar will continue to weaken,” the analyst said, boosting emerging market currencies and helping investment in those countries. Kotecha named Brazil and Mexico as two of the best emerging countries in which to invest. Morgan Stanley and BlackRock recently shared Kotecha’s emerging market optimism. This column will identify three tech stocks buy in emerging markets.

So far in 2023, the street been in love enough with technological values. So, with heavyweight analysts calling for investors to pump money into emerging markets and the street embracing tech, now is the time to buy emerging market tech stocks.

Here are three great choices in this category.

Tech stocks to buy: America Movil (AMX)

As part of the big US trend towards offshoring, many US-based companies are building or preparing to build factories in Mexico. For example, Elon Musk You’re here (NASDAQ:TSLA) recently announced that it would build a large plant in northern Mexico. Indeed, according to the New York Times, “In the first 10 months of last year, Mexico exported $382 billion in goods to the United States, an increase of more than 20% over the same period in 2021”.

Mexico’s economy is expected to get a big boost from this trend, boosting telecommunications company America Movil, which operates in 24 Latin American countries but mainly focuses on Mexico and Brazil. AMX derives 35% of its EBITDA from Mexico. The company claims that it is the leading telecommunications company in terms of market share in Mexico and Brazil.

In addition to traditional telecommunications services, America Movil operates dozens of data centers that it uses “to manage a number of cloud solutions.” The company claims that in Mexico it has 81.36 million “wireless subscribers”.

In addition to benefiting from the improving Mexican economy, AMX’s results are expected to be significantly improved by increased use of 5G technology in the coming years.

Trading at just 8.5 times analysts’ estimated average earnings per share for 2024, the valuation of AMX stock is very attractive.

MercadoLibre (MELI)

Source: tiagogarciafoto / Shutterstock.com

The growth of the Latin American e-commerce company MercadoLibre (NASDAQ:MELI) is really extremely impressive.

In the last trimester, for example, MELI’s the gross volume of goods jumped 35% year over year, excluding currency fluctuations. Unsurprisingly, the company cited Mexico and Brazil, where its currency-neutral GMV climbed 22% and 28%, respectively, as key to its fourth-quarter growth. Growing its active user base by 27% year-over-year in the fourth quarter to nearly 44 million, MELI’s fintech business is also growing rapidly.

Last quarter, MercadoLibre’s overall sales climbed 56.5% year-on-year, excluding currency variations, and revenue from its fintech unit soared 93% year-on-year on a currency-neutral basis to more than $1.3 billion.

Unlike many e-commerce businesses, MELI is highly profitable, as its operating profit grew to $1.03 billion last year from $441 million in 2021. Meanwhile, its revenue of business 2022 was $10.54 billion versus $7.07 billion in 2021.

In a note to investors dated March 3, the British bank Barclays raised its target price on MELI shares at $1,475 instead of $1,250. The company expects MELI to continue to gain market share in Brazil, and it maintained an “overweight” rating on the stock.

Xpeng (XPEV)

Source: shutterstock.com/RobertWay

According to my previous predictions, Xpeng (NYSE:XPEV), a China-based electric vehicle manufacturer, is becoming a leader in driver assistance technology.

During the company calculation of fourth quarter resultsOn March 17, its CEO, He Xiaopeng, reported that its driver assistance system, XNGP, “outperformed the real-world on-road performance of its peers in the United States.”

In other words, XNGP, powered by advanced AI technology, is superior to any offering available in the United States. The system will be deployed in more than ten Chinese cities in the second half of this year.

Additionally, Xpev estimates that, by mid-2026, XNGP will be able to operate vehicles at a level similar to that of a “human driver with three years of driving experience”. The company added that at this point, human drivers using the system will only need to take action once every 100 kilometers on average.

However, the Street, which tends to be short-sighted, was probably more excited when Xpeng announced on the call that its orders jumped 100% in February compared to January.

“Our new order intake in February was up 100% from the previous month. With the strong momentum in P7i orders, following its official launch, we expect considerable monthly growth in total new orders in March,” said said He, CEO of the company.

While Xpeng seemed to attribute the rise to its introduction of a new “sports sedan”, I think the upcoming launch of XNGP also likely played a part in the huge increase in orders.

As of the date of publication, Larry Ramer held shares of XPEV. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.