STMicroelectronics (STMN) AI Stock Analysis

Company Guidance

ST expects Q4 2026 revenues of $4.15 billion, plus/minus 350 basis points at the midpoint, up 10.5% sequentially and 24.7% year-over-year, with gross margin at about 39%, plus/minus 200 basis points, including about 40 basis points of unused capacity charges; the 2026 midpoint implies revenues of about $14.5 billion, up 22.8% year-over-year, gross margin of about 36.4% and non-U.S. GAAP gross margin of about 36.6%, an improvement of 270 basis points versus fiscal year 2025. Q4 non-U.S. GAAP net OpEx is expected at about $1.035 billion and full-year 2026 slightly above $3.8 billion; ST expects 44% to 46% gross margin in its intermediate financial model, more than 400 basis points of structural gross margin improvement toward the end of 2027 or in early 2028, and 2027 cost savings of $100 million, $120 million benefit, although OpEx is expected to go up. AI datacenter revenue is expected to be about $1.3 billion in 2026 and well above doubling this number in 2027, with microcontroller revenue growing 2x and silicon photonics reaching tens of percent of the complete revenue consideration; silicon photonics capacity is expected to increase by 4x year-on-year, actually a little bit more than 4x. For Q1, ST expects to be at least at the current consensus for gross margin and revenue with 86 days, automotive is expected to grow slightly above 10% for full-year 2026, Power Discrete growth in Q4 will be well above 20% -- 25%, and silicon carbide is expected to grow about 20% this year and deliver another year of significant growth next year.