Nvidia (NVDA),Amazon(AMZN), alphabet (Google), Microsoft (MSFT) says it aims to reduce dependence on China for artificial intelligence (AI)-related hardware. wall street journal. To achieve this, these companies asked their supplier Foxconn Technology (also known as Hon Hai Precision Industry) toHNPF) and expand production in Mexico.
It is noteworthy that Taiwan-based Foxconn and other manufacturing companies have increased their investments in Mexico in recent years. Foxconn alone has invested about $690 million in the country over the past four years.
Reasons behind tech giants moving production to Mexico
Escalating technological and national security tensions between the United States and China are causing companies to reevaluate their supply chains. Both countries have introduced restrictions and bans on the export of sensitive, cutting-edge technology, forcing companies to consider alternative measures.
Additionally, the USMCA, a free trade agreement signed between the United States, Mexico, and Canada in 2020, is prompting manufacturers to diversify from China to Mexico.
Interestingly, the agreement includes not only AI hardware manufacturers but also several automakers. According to data released by the International Organization of the Automobile Industry (OICA), Mexico's automobile production will increase by 14% from the previous year to approximately 4 million units in 2023.
Which are the best tech stocks to buy?
Wall Street analysts are currently bullish on all four stocks: NVDA, MSFT, AMZN, and GOOGL. Analysts expect Amazon's stock to most likely rise by 16.2%. Additionally, AMZN stock's Smart Score is a “Perfect 10”. Therefore, Amazon appears to be the best technology stock among his four companies.
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