STMicroelectronics NYSE:STM, a chipmaker supplying semiconductors for data centers, satellites, cars, industrial equipment, and personal electronics, saw its shares fall as much as 17% after its third-quarter revenue forecast missed analysts' expectations. The company expects sales of about $3.7 billion at the midpoint of its guidance, representing growth of roughly 16% from a year earlier but falling below the $3.79 billion average analyst estimate compiled by Bloomberg. Shares were down 15% at 12:07 p.m. in Paris, marking their largest intraday decline since July 2025, although the stock remained up 121% in 2026 as investors continued to focus on the company's growing data center business. The weaker guidance may have reduced expectations for a faster recovery supported by demand from the artificial intelligence infrastructure market.
STMicroelectronics CEO Jean-Marc Chery said revenue growth is expected to accelerate during the fourth quarter, supported mainly by customer programs involving AI data centers and low-Earth-orbit satellite communications. The company expects fourth-quarter revenue to exceed $4 billion, which would represent growth of more than 20% from a year earlier, compared with analysts' estimate of approximately $4.03 billion. STMicroelectronics also raised its AI-related sales outlook slightly to more than $1 billion in 2026 and well above $2 billion in 2027, after previously expecting its data center business to generate $1 billion this year and double next year. The company's longer-term growth outlook is also supported by an agreement to supply semiconductors, including power-management chips, to Amazon.com, a technology company whose AWS division provides cloud computing services, over the next three to five years.
Citi, a financial services company whose analysts cover the semiconductor sector, said the outlook suggests a developing cyclical recovery across STMicroelectronics' markets and continued acceleration in AI and data center demand, although rising expectations could make further near-term gains more difficult without higher earnings estimates. Texas Instruments NASDAQ:TXN, a competing semiconductor company, also issued a sales forecast above expectations, but its shares fell in premarket trading after gaining 70% in 2026, possibly suggesting that investors are becoming more cautious toward mature chipmakers following their strong rallies. STMicroelectronics reported second-quarter net income of $222 million, reversing a $97 million loss from a year earlier, while its projected third-quarter gross margin of approximately 37% was slightly above the 36.76% analyst estimate. Investors may view the improving profitability, AI revenue targets, and expected fourth-quarter acceleration as encouraging, although the third-quarter revenue miss shows that elevated expectations could continue to drive volatility in the shares.