In Europe again euphoria in chips with Intel booming after above-expected accounts

(Il Sole 24 Ore Radiocor) - Intel's turnaround, with an above-expected quarterly report and a boom in the stock's after-hours trading, supported the chip sector in Europe in a mostly negative session for stock markets. The rally of Stmicroelectronics in Piazza Affari and also in Paris continued. After booming on the eve of the event (+14%), thanks to a better-than-expected quarterly report, the Italo-French multinational's stock is trading at its highest level since March 2024 (above EUR 43), also benefiting today from Intel's boost and the promotion of some analysts. The US group - one of the world's leading chipmakers along with Tsmc and Samsung Electronics - posted revenues up 7.2% year-on-year in the first quarter of the year to $13.58 billion against an estimate of $12.3 billion, with the data centre and artificial intelligence segments at $5.1 billion. Adjusted earnings per share were $0.29, against a forecast of $0.01 expected by many analysts. The stock soared 20 per cent in after-hours trading, generating a positive wave for the entire sector. In Europe, Be Semiconductor led in Amsterdam, while Sap led the gains in Frankfurt.

Intel has indicated that demand continues to outstrip supply in all divisions, while maintaining caution on macros, component cost and PCs, Equita analysts note, pointing out that the message on the group's turnaround has been strong: "the company is now more financially and operationally sound, with the priority shifting from stabilisation to increasing capacity". Overall, 'the message on Intel's turnaround is positive for semi-equipment suppliers, who have reduced exposure in recent years due to Intel-specific problems, for whom it remains a significant customer'. As for St, the group's growth and the growing weight of megatrends related to artificial intelligence and data centres, give much more visibility to 2027/28 estimates, say Equita analysts, who confirm 'Buy' recommendation and raise the target price to €50 per share (from €33). Banca Akros also raises its price target to EUR 46 (from EUR 35), confirming its 'Accumulate' recommendation.

For Deutsche Bank, "with quarterly revenues continuing to grow, even in Q3 and even more so in Q4, probably beyond normal seasonality, St is approaching a $4 billion quarterly revenue pace next year. This should allow the company to achieve (adjusted) gross margins close to 40%, compared to the 34-35% range in the first half of 2026". Buy recommendation with target price between EUR 42-52 confirmed.