STMicroelectronics Shares Jump as Data Center Revenue Outlook Raised on AI Boom
STMicroelectronics (STMPA.PA, STMMI.MI) shares surged in early Tuesday morning trading after the semiconductor manufacturer sharply raised its revenue outlook for its data centers segment, citing sustained demand for artificial intelligence infrastructure and continued progress in expanding capacity.The Franco-Italian chipmaker expects data center revenue to reach $1 billion in 2026, nearly double from its previous forecast of "nicely above $500 million." For 2027, STMicroelectronics expects data center revenue to double, compared with the prior guidance of "well above $1 billion," assuming current market momentum and customer engagements continue.The stock rose nearly 9% in both Paris and Milan following the announcement.Management had mentioned during the first-quarter earnings call in April that the company reinforced its position as a supplier of critical semiconductors for AI data centers "from the grid to the core, and from the core to the user.""In data center, it is clear that we are seeing a really strong growth in term of demand, acceleration, including a cloud optical interconnect, both for our PIC100, for our BiCMOS, but I repeat for our general-purpose microcontoller and Analog and Power/Discrete as well," Jean-Marc Chery, chief executive and chairman, said during the call.Earlier this year, STMicroelectronics partnered with chipmaker Nvidia (NVD.F) to expand its AI datacenter power conversion portfolio, adding two new power conversion stages to its existing architecture. It also ramped up production of its silicon photonics-based PIC100 platform, which is used by hyperscalers for optical interconnect for data centers and AI clusters.In February this year, it expanded its strategic collaboration with Amazon's (AMZ.F) Amazon Web Services through a multi-year, multi-billion-dollar commercial deal to enable new high performance compute infrastructure for cloud and AI data centers.
