STMicroelectronics raised its 2026 artificial intelligence data centre revenue target to about $1.3 billion following strong third-quarter results. Operating income for the period almost doubled year-on-year to $429 million, topping consensus estimates on the back of a 37.3 per cent gross margin. Robust sales across computer peripherals, communication equipment, and personal electronics further reinforced the quarter's performance. Chief Executive Jean-Marc Chery confirmed that capacity expansion remains ongoing as market demand continues to outpace available supply.
Key points
Optical silicon photonics chips serve as a primary growth catalyst for the company's targ…: Optical silicon photonics chips serve as a primary growth catalyst for the company's target to exceed $2 billion in data centre revenue by 2027.
Manufacturing capacity is being actively expanded to address persistent market demand tha…: Manufacturing capacity is being actively expanded to address persistent market demand that currently outstrips chip supply.
Strong earnings across communications and peripherals helped company shares rebound from…: Strong earnings across communications and peripherals helped company shares rebound from an initial 3.7 per cent decline to trade higher.
Sources checked by our analysis pipeline: 1
STMicro lifts data centre revenue forecast after Q3 profit beat
Oct 29 : STMicroelectronics raised its 2026 forecast for AI data centre revenue on Thursday, after demand from data centres and satellite operators helped it beat market expectations for third-quarter earnings.
The Franco-Italian chipmaker now expects to book about $1.3 billion in data centre revenue in 2026, up from a July forecast of more than $1 billion. It reiterated the 2027 goal of well above $2 billion.
CEO Jean-Marc Chery told analysts demand was driven mainly by STMicro's silicon photonics chips, which use light rather than electrical signals to move data between servers.
The company's quarterly operating income excluding one-off charges was $429 million, nearly doubling from a year ago and beating the $400.5 million expected by analysts polled by LSEG.
It forecast fourth-quarter revenue of $4.15 billion, up from $3.76 billion in the third quarter, give or take 3.5 per cent. Analysts had expected $4.10 billion.
"In an environment where demand remains well above supply, we continue to expand capacity," Chery said in the earnings statement.
Robust commercial demand drove strong booking momentum across the real estate firm's 56 million square foot portfolio during the first half of the fiscal year. However, heavier tax expenses squeezed profitability during the second quarter despite a substantial improvement in top-line revenue. This performance underscores a mixed financial landscape marked by surging operational growth alongside short-term tax headwinds.
Mounting operational pressures driven by currency depreciation and global headwinds have severely constrained airline earnings across the aviation sector. Parent company InterGlobe Aviation recently slipped into a substantial quarterly net loss despite solid revenue expansion, leaving leadership with few alternatives to protect profit margins. Passing these elevated costs directly onto passengers has emerged as the primary mechanism to stabilize near-term financial performance.
The platform secured this major capital injection to finance an operational push outside of its foundational prediction trading space. With an expanded war chest, the firm aims to build out new business lines that diversify its financial footprint. The massive valuation underscores soaring private investor confidence in the growth trajectory of regulated alternative exchange models.