STMicroelectronics, the Franco-Italian chipmaker, has announced a significant increase in its revenue targets for the data centre sector, citing robust demand linked to AI infrastructure. This announcement has propelled the company's shares to a 25-year high, reaching €65.21 per share, a peak not seen since September 2000.
The company now anticipates data centre revenue to approach $1 billion by 2026, a substantial upgrade from its earlier forecast of over $500 million. Furthermore, STMicroelectronics indicated that if current trends persist, revenues could potentially double in 2027, with expectations set at "well above $1 billion" for that year.
Market Impact
As of 0738 GMT, STMicroelectronics' shares had risen by 8.4%, making it one of the top gainers on Europe's STOXX 600 index. Analysts from Jefferies estimate that the data centre segment could contribute approximately 7% to the company’s overall revenue growth of 20.5% projected for 2027.
Focus on Infrastructure
STMicroelectronics' strategy emphasizes infrastructure rather than the graphics processors commonly associated with AI model training. This focus positions the company to benefit from the increasing demand for the essential components that support AI operations.
Production Capacity Enhancements
The revised revenue targets also reflect advancements in the company’s manufacturing capabilities. STMicroelectronics is ramping up its factory capacity to meet the rising demand.
Analyst Insights
J.P. Morgan analysts noted that the new guidance regarding AI is likely to lead to upward revisions in revenue estimates for both 2026 and 2027, with a stronger impact anticipated in 2027.
