Buy on St with global tech and good prospects on AI and data centres

(Il Sole 24 Ore Radiocor) - Turmoil has returned to tech, amid a more favourable climate for the sector globally after the rises seen on Wall Street on the eve of the event and on Asian listings. The European sector was also positive, with Infineon running in Frankfurt and Asml Holding in Amsterdam, among others. In Milan, Stmicroelectronics is moving sharply higher. Even Prysmian is indirectly benefiting from the sector's uptrend, focusing on the tech and tlc cable business.

But looking in more detail at St. Louis, the flow of positive comments from analysts after the Cloud AI business event, with a focus on Stmicro's growth potential in the data centre segment, also contributed to the stock's positive performance. According to Deutsche Bank, the group is starting to position itself more strongly in this market. Following the growth of Infineon's AI data centre business, 'St is now preparing to make AI data centres one of the company's main growth drivers'. In particular, the analysis shows that the company could achieve revenues from Cloud AI "well over $500 million in 2026, with growth well over $1 billion in 2027". Deutsche Bank cites the recent multi-billion dollar, five-year 'large contract acquisition with Amazon Web Services'. In the medium term, according to the analyst, the AI business could contribute around 4-8% of the group's growth in 2027.

Equita notes that "management's presentation and tone remain positive on market dynamics and growth opportunities in the data centre world", also pointing out here that the company is targeting AI data centre revenues of over USD 500 million in 2026 and "well over USD 1 billion in 2027". Another area of growth concerns optical connectivity: "Optical modules allow not only to connect distant data centres, but also to connect large clusters and, progressively, to increase the performance of individual racks, where over time copper should leave more and more room for optical," writes Equita. According to analysts at Banca Akros, considering global capacity growth estimates for AI, the total addressable market for Stmicro between 2026 and 2030 could reach around $26 billion, "which could imply further non-linear AI revenue growth beyond 2027". "AI infrastructure is experiencing unprecedented scalability, with optical interconnect performance in the cloud becoming a critical bottleneck," they add, confirming their 'buy' recommendation on the stock with a €35 target price. Equita also maintains a 'buy' rating with a target price of 30 euros.