Geneva, May 10, 2026, 00:06 CEST
Shares of STMicroelectronics N.V. surged 5.9% to finish at $59.17 on Friday, after Berenberg stuck with its Buy call and maintained a 53-euro price target for the chipmaker. The gain pulled STM back into the spotlight following a choppy period for semiconductor stocks in Europe.
This isn’t just about a lone analyst call anymore. Investors are weighing whether ST’s traditional auto and industrial chip business is getting overtaken by revenue tied to AI hardware, power infrastructure, and even satellite connectivity. Analog chips—those that process everyday electrical signals and manage power—have abruptly found themselves swept into the AI story, far from their reputation as a staid market backwater. In a note Friday, Berenberg’s Tammy Qiu said analog-chip makers like Infineon and ST are building momentum this year, as AI-linked sales pick up. She flagged that ST has growth engines outside its legacy segments.
ST’s latest results seemed to support that case. The company posted $3.10 billion in first-quarter revenue, along with a gross margin of 33.8%—that’s the slice left after production costs. For the second quarter, ST is guiding to roughly $3.45 billion in revenue at the midpoint. CEO Jean-Marc Chery cited “improving demand,” noting strong bookings and distributor inventory back at normal levels. He also flagged AI-driven projects and data-center sales, projecting more than $500 million in 2026, jumping to well over $1 billion by 2027. ST News
Morningstar, in a May 8 note picked up by Yahoo Finance, ran through the current AI and low-Earth-orbit chip thesis and bumped its fair-value estimate on STMicroelectronics up to $46 from $31. That’s a significant jump, yet it remains under the stock’s U.S. close from Friday.
Space isn’t an afterthought anymore. ST is shooting for more than $3 billion in total revenue from its space semiconductor segment between 2026 and 2028, thanks in large part to demand for chips powering low-Earth orbit (LEO) satellite networks. Unlike older geostationary satellites, LEOs operate much closer to the planet, which slashes broadband signal lag. According to Reuters, ST’s LEO revenue jumped to roughly $600 million in 2025 from $175 million in 2021 and is set to approach $1 billion in 2026. The market’s still in its “early innings,” executive Remi El-Ouazzane told analysts. Reuters
The competitive focus here? Largely European. Berenberg left its Buy call intact on Infineon and bumped the German company’s price target. Analyst Qiu described Infineon’s 2027 AI revenue target as conservative. For ST, the comparison doesn’t land with Nvidia-type processors—instead, think chips that handle power, sensors, and signal flow in data centers, vehicles, and industrial gear.
There’s another angle here. Simply Wall St points out that, even after the recent report, 19 analysts are sticking with their $14.1 billion revenue target for STMicroelectronics in 2026, though they’ve trimmed the EPS outlook to $1.05 from $1.18. Friday’s uptick doesn’t leave much cushion if AI or satellite business takes extra time to help margins—and any fresh stumble in automotive or industrial could hit harder.
Execution now takes priority over bold talk. For investors, eyes are on second-quarter sales — specifically, signs of improved factory utilization and trimmed expenses from idle capacity. The AI and space narrative needs to turn into plain operating leverage here.
The tape stayed clean for now. Investors shrugged off softer EPS forecasts, choosing instead to lean into the view that ST’s product mix is shifting. Still a cyclical chipmaker, sure, but the focus has shifted: the market’s zeroing in on the company’s exposure to satellites, AI infrastructure, and the power chain built around those sectors.
