PARIS, July 23, 2026, 12:08 CEST
Shares of STMicroelectronics N.V. EPA:STMPA dropped 13.6% to €50.32 as of 11:48 CEST on Thursday. The company’s second-quarter EBITDA came in almost 15% below expectations. An increased AI data-centre goal did not offset the disappointment.
Paris cash trading was active. ST lagged behind as the STOXX 600 slipped 0.5%, while technology stocks declined by 0.8%.
The decision came after a strong surge. Despite Thursday’s decline, shares were still over 110% higher this year. Investors were optimistic about a quicker rebound from the downturn in automotive and industrial sectors.
Regarding the broader decline in technology, Allspring Global Investments portfolio manager Rushabh Amin pointed to “a slight unwind in sentiment and in positioning.” Reuters
ST’s business breakdown reveals that profit strength is concentrated in certain areas. Embedded processing and RF optical communications together accounted for $409 million of the $721 million rise in yearly sales.
The divisions delivered $320 million in operating profit, making up 88% of total net reported segment profit, while accounting for 46% of revenue.
| Q2 2026 segment | Revenue ($m) | Y/Y growth | Operating margin | Contribution to ST’s sales increase |
|---|---|---|---|---|
| Analog, MEMS and sensors | 1,426 | 26.0% | 10.1% | 40.6% |
| Power and discrete | 464 | 3.7% | -21.4% | 2.4% |
| Embedded processing | 1,147 | 35.5% | 19.7% | 41.6% |
| RF optical communications | 445 | 32.0% | 21.2% | 15.1% |
Company data used to determine growth contribution. The “Others” category brought in $2 million. STMicroelectronics
Power and discrete continued to weigh on results. The segment reported a wider operating loss of $99 million, compared to $56 million previously, even though revenue increased by 3.7%.
Group EBITDA reached $679 million, falling short of the $797.7 million anticipated by analysts. The 15% shortfall exceeded the miss seen in third-quarter sales.
ST projected third-quarter revenue of $3.70 billion, slightly below the analyst consensus of $3.72 billion, a difference of 0.5%.
Chief Executive Jean-Marc Chery reported “strong bookings in all end markets.” He also noted constrained supply and reduced inventories at distributors. STMicroelectronics
Management is projecting data-centre revenue to exceed $1 billion this year, with expectations for more than $2 billion in 2027 and fourth-quarter revenue topping $4 billion.
Cash metrics saw an uptick. Free cash flow was positive at $75 million and inventory days declined to 126 from 166.
The challenge is still the group’s profit conversion. For the third quarter, the company forecasts a gross margin of 37%, factoring in 70 basis points from unused-capacity charges.
Risks persist. The forecast does not factor in any additional tariff adjustments. Reduced customer demand or decreased factory utilization could impact sales and margins.
The fourth quarter will provide another key test, with management anticipating that revenue will get a boost from data centres and low-Earth-orbit satellite projects.
