Amid Artificial Intelligence's (AI) widespread utility, organizations are eagerly embracing it for operational overhaul and gaining an edge. Considering the global AI growth, let’s have a look at robust foreign stocks América Móvil, S.A.B. de C.V. (AMX), TIM S.A. (TIMB), and PLDT Inc. (PHI) that could aptly ride the AI boom.
Before examining the highlighted stocks, let's acquire an understanding of the AI landscape.
The past few years have witnessed profound growth and transformation in the global AI sector. It has fundamentally altered multiple industries and propelled technological progress. Esteemed tech giants and burgeoning start-ups have actively invested, fueling the industry's evolution.
That said, between 2020 and 2022, annual corporate global investments in AI startups surged by $5 billion, almost doubling prior funding, predominantly sourced from private capital within U.S. enterprises. As of 2023, the worldwide AI market stands at $142.3 billion and maintains its upward trajectory due to substantial investment inflow.
Furthermore, enterprises are embracing AI to enhance efficiencies, economize time, and reduce expenses. 64% of businesses, as unveiled by a Forbes Advisor survey, agree that artificial intelligence will elevate their comprehensive productivity. This underscores the escalating faith in AI's capacity to revolutionize business functionalities.
Moreover, the global AI market is poised to sustain its ascent, propelled by numerous emergent technologies such as cloud computing, big data, and the Internet of Things (IoT). As per a Markets and Markets report, the global artificial intelligence market size is expected to grow at 36.8% CAGR and record revenue of $1.35 trillion by 2030.
On top of it, according to McKinsey, large-scale deployment of AI can help telecommunication companies or telcos protect their core revenue stream and drive margin growth.
Against this backdrop, let's delve into the fundamentally sound foreign telecom stocks AMX, TIMB, and PHI, unraveling what renders them worthwhile investments amid the AI boom.
América Móvil, S.A.B. de C.V. (AMX)
AMX, based in Mexico City, Mexico, provides telecommunications services such as mobile and fixed-line voice, wireless and fixed data, Internet, equipment, and accessory sales. Its segments include Mexico Wireless; Mexico Fixed; Brazil; Colombia; Southern Cone; Andean Region; Central America; the Caribbean; the United States; and Europe.
On July 24, AMX announced the acquisition of shares equivalent to 5.55% of voting rights in Telekom Austria AG, executed by its subsidiary América Móvil, B.V. This purchase elevates AMX's stake in Telekom Austria AG from 51% to 56.55%, stemming from a private investor's divestiture.
This move could leverage increased influence and potential financial gains, aligning with AMX's strategic expansion objectives and fortifying its position in the telecommunications sector.
For the second quarter that ended June 30, 2023, AMX’s net income from continued operations increased 85.7% year-over-year to MXN 25.88 billion ($1.52 billion). Its earnings per share grew 95.2% from the year-ago value to MXN 0.41.
In addition, as of June 30, 2023, the company’s current assets stood at MXN 368.13 billion ($21.57 billion), compared to MXN 361 billion ($21.15 billion) as of December 31, 2022.
For the fiscal year ending December 2023, AMX’s revenue is expected to increase 6.5% year-over-year to $48.56 billion. The company’s EPS for the current year is expected to come in at $1.69, up 27.7% from the prior year. Moreover, the company has surpassed the consensus revenue estimates in three of four trailing quarters.
Shares of AMX have gained 6.7% year-to-date to close the last trading session at $19.53.
AMX’s solid fundamentals are apparent in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
AMX has an A grade for Stability and a B for Quality and Growth. It has topped the A-rated 44-stock Telecom - Foreign industry.
In addition to the POWR Ratings I’ve just highlighted, you can see AMX’s ratings for Value, Momentum, and Sentiment here.
TIM S.A. (TIMB)
Headquartered in Rio de Janeiro, Brazil, TIMB delivers mobile voice, data, and broadband services throughout Brazil. Its services encompass mobile, landline, long-distance, and data transmission. Additionally, it provides ultra-broadband, digital content, and customized package services.
On July 12, Sparkle, TIMB's global operator, in collaboration with Panamanian telecommunications firm Trans Ocean Network (TON), launched the Panama Digital Gateway (PDG). This eco-friendly data center and connectivity hub, situated in Panama, intends to be the primary digital focal point for Central America, the Andean region, and the Caribbean.
This venture underscores TIMB's commitment to innovation and also solidifies its position as a sustainable digital trailblazer. By establishing the eco-friendly data center and connectivity nexus in Panama, TIMB would strategically amplify its global influence.
Furthermore, on June 13, Sparkle revealed the endorsement of a pact with UAE's Kush Investments. This accord aims to furnish a lasting resolution within the impending Blue & Raman Submarine Cable Systems, directed at catering to the East Africa region's connectivity needs.
Sparkle's involvement in international telecommunication infrastructure and Africa's digital expansion could drive revenue growth. Moreover, enhanced collaboration and educational programs could amplify brand value, fostering new opportunities and strengthening the company's financial position.
During the second quarter that ended June 30, 2023, TIMB’s domestic revenue marginally increased year-over-year to €2.92 billion ($3.18 billion), whereas its total revenues increased 2.8% year-over-year to €4 billion ($4.35 billion). Also, the company’s EBITDA grew 5.6% from the year-ago value to €1.64 billion ($1.78 billion).
The consensus revenue estimate of $4.82 billion for the fiscal year ending December 2023 reflects an 18.2% year-over-year improvement. Likewise, the consensus EPS estimate for the ongoing year is expected to grow 48.7% from the previous year to $0.97. Also, the company surpassed the consensus EPS estimates in all four trailing quarters.
Shares of TIMB have surged 45.3% year-to-date, closing the last trading session at $15.04.
TIMB’s robust outlook is reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
TIMB has a B grade for Stability, Sentiment, and Quality. It is ranked #2 out of 44 stocks within the Telecom – Foreign industry.
Click here to access additional TIMB ratings (Growth, Value, and Momentum).
PLDT Inc. (PHI)
Based in Makati City, the Philippines, PHI delivers cellular mobile services, Internet broadband distribution, operations support, software development, and satellite information and messaging offerings. It also retails Wi-Fi access equipment. The company's segments include Wireless; Fixed Line; and Others.
On August 14, PHI and Smart, a wireless communications and digital services subsidiary of PHI, announced their collaborative efforts with the Armed Forces of the Philippines (AFP) to fortify the nation's cybersecurity framework against various threats, including suspected state-sponsored cyber activities.
The endeavor could solidify PHI's position as a leader in telecommunications and also pave the way for increased demand for cybersecurity services in the evolving digital landscape. This diversification could augment PHI's revenue streams, fostering resilience and growth in the face of emerging security challenges.
Furthermore, on August 7, PHI reported discussions with Radisys® Corporation, a Jio Platforms Limited subsidiary, to create advanced digital experiences for Filipinos. Radisys, a multinational solutions provider, designs pioneering networking, communication, device, and digital engagement platforms globally.
Leveraging Radisys' global expertise in cutting-edge networking, communication, and digital engagement solutions, PHI could enhance its offerings, elevate customer experiences, and strengthen its competitive edge in the telecommunications landscape.
For the second quarter that ended June 30, 2023, PHI’s revenues from contracts with customers increased 1.4% year-over-year to PHP 51.68 billion ($918.90 million). Its net income grew 20.9% from the year-ago value to PHP 9.46 billion ($168.18 million).
Also, EPS attributable to common equity holders of PHI came in at PHP 43.61, up 22.5% year-over-year improvement. As of June 30, 2023, the company’s total noncurrent assets stood at PHP 546.65 billion ($9.72 billion), compared to PHP 542.83 billion ($9.65 billion) as of December 31, 2022.
Analysts expect PHI’s revenue to increase 5.6% year-over-year to $3.98 billion for the fiscal year ending December 2024. The company’s EPS for the same period is expected to come in at $2.76, up 3.2% from the prior year. The stock marginally gained intra-day, closing the last trading session at $21.24.
PHI’s positive outlook is apparent in its POWR Ratings. The stock has an overall rating of B, which translates to Buy in our proprietary rating system.
PHI has a B grade for Stability, Sentiment, and Quality. It is ranked #3 out of 44 stocks within the same industry.
Click here to access additional PHI ratings for Growth, Value, and Momentum.
What To Do Next?
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AMX shares were trading at $19.21 per share on Monday morning, down $0.32 (-1.64%). Year-to-date, AMX has gained 6.89%, versus a 15.13% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
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