STMicroelectronics Expects Strong Sales Growth on AI and Satellite Demand

what happened

Chipmaker STMicroelectronics expects solid sales growth this year, according to Dow Jones Newswires. The company projects revenue of roughly $14.5 billion, up nearly 23% from last year, and a gross margin of about 36.4%, compared with 33.9% a year earlier.

CEO Jean-Marc Chery pointed to data centers built for artificial intelligence and satellite networks as the main growth drivers. Revenue for the quarter ended September 26 rose nearly 18% to $3.76 billion, slightly above company guidance and analyst expectations. However, net profit of $291 million fell short of the $343 million analysts had forecast.

why it matters

The stock has nearly doubled since the start of the year on investor enthusiasm for AI, so the market is watching earnings quality closely. The strong outlook supports the wider semiconductor sector, while the profit miss could weigh on the shares in the short term.

market impact

STMicroelectronics and chip stocks: strong revenue outlook supports the sector, but the profit miss weighs on the shares

• ↔STMicroelectronics shares mixed — strong revenue outlook offset by profit below analyst forecasts

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