STM soars on the stock exchange (+14.1%) after a better-than-expected quarter

After climbing almost 40% in a month, STM closed yesterday's session up 14.1% to €42.82 from €37.53 at the previous close. At the basis of the exploit were the first quarter results, which were better than the company's own expectations, and the indications provided for the continuation of the year, which suggest that the Italian-French semiconductor multinational has finally returned to a path of growth, breaking out of the negative spiral of unfulfilled forecasts that had had a heavy impact on the company's valuation.

Thus, first-quarter revenues stood at $3.095 billion, up 23% from the same period in 2025, or 21.4% excluding the contribution of the recent MEMS sensor acquisition from Dutch NXP. Compared to gross profit - up 24.3% to $1.045 billion - the margin improved by 40 basis points from 33.4% to 33.8%. Operating income increased from $3m to $70m, with the margin rising from 0.1% to 2.3%, while net profit fell 33.7%, from $56m to $37m, but recovered from the $30m red in the final quarter of 2025.

"Net revenues in the first quarter were above the midpoint of our forecast, driven mainly by higher revenues in ongoing programmes with our customers in the personal electronics and communication equipment and computer peripherals areas," explained CEO Jean Marc Chery. "Despite macroeconomic uncertainty, we saw an improvement in demand in the first quarter with sustained order bookings and normalisation of inventories in distribution," Chery added.

For the second quarter, STM expects revenues to grow by 24.9% to $3.45 billion and gross margin to be around 34.8%, still discounting 100 basis points of under-utilisation charges. For the full year 2026, revenues are expected to 'grow at double-digit rates'. This performance, STM's CEO emphasised, will be driven not only by the programmes already underway for key customers, but also 'by the new artificial intelligence programmes'. There are three strands the group is working on: photonics, optical cables to connect users to servers; power, from the network to the processor; and cooling systems for data centres, where ST is the only company with a complete product range. We do not need acquisitions because it is a matter of developing products, explained Chery - responding at a press conference to a question from Radiocor (Il Sole-24 Ore group) - but we do need investments in production "as we are doing in France in Crolles and in Italia, in Agrate and Catania".

Data centre-related revenues, expected to be above 500 million this year, will rise to over a billion next year. On 4 May, ST will hold a call with analysts dedicated to developments in low-orbit communication satellites, a sector from which the group expects to obtain cumulative revenues in the period 2026-2028 of over $3 billion. Two are STM's main customers in the field. They have not been named, but both Elon Musk with Starlink and Amazon with Leo have major development programmes in this regard.