Key insights
- STMicroelectronics significantly raised its 2026 revenue target for its data center business to $1 billion, driven by strong AI infrastructure demand and increased manufacturing capacity. This upgrade, coupled with a positive 2027 outlook, suggests robust growth in the semiconductor sector supporting AI hardware. While not directly involved in AI chip training, STMicro's focus on surrounding infrastructure highlights a broader demand trend. This positive development for a key supplier could indirectly benefit US tech companies reliant on this infrastructure, signaling continued investment in the AI ecosystem.
Investing.com -- STMicroelectronics upgraded its revenue outlook for its data centre business on Tuesday, pointing to robust demand driven by AI infrastructure buildout and gains in manufacturing capacity.
The Franco-Italian chipmaker, which supplies Tesla and Apple, now targets data centre revenue of roughly $1 billion in 2026, up from a prior forecast of above $500 million.
Shares jumped more than 8% in Paris trading. As of Monday’s close, the stock has surged more than 164% so far this year.
"Assuming the current dynamic continues and with the current engagements we have, revenues could double in 2027," STMicro said in a statement. The company had previously set a goal of revenue "well above $1 billion" for that year.
Jefferies analysts said the announcement "reflects confidence in the execution of this capacity ramp." Commenting on the 2027 outlook, the analysts said optical products are again expected to drive about two-thirds of growth, with power chips contributing the remaining one-third.
"Data centers alone will, therefore, contribute around 7% growth to STM in 2027, out of our 20.5% growth expectation," they added.
STMicro said in February it would supply semiconductors to Amazon’s AWS division, covering chips used in connectivity and power management applications. Chief Executive Jean-Marc Chery has been steering the company away from its traditional base in consumer electronics and automotive toward faster-growing markets, with data centres among the key targets.
The chipmaker’s data centre business is oriented less around the graphics processors that power AI model training and more toward the surrounding hardware that keeps those systems running.
The upgraded outlook also reflects progress in scaling up factory output, the company said.
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