STMicroelectronics NV saw its stock surge by nearly 10.0% after the company issued a formal update that substantially increased its data center revenue target for 2026. The Geneva-headquartered chipmaker now expects data center revenue of approximately $1 billion for 2026, up from a prior forecast described as "nicely above $500 million."
Beyond 2026, STMicroelectronics told investors that data center revenue could double again in 2027 compared with the previous expectation of "well above $1 billion." The company attributed the higher targets to sustained AI infrastructure-led demand and to recent advances in ramping production capacity.
The guidance revision was anchored by several milestones the company has announced in recent months. These include an expanded multi-year engagement with Amazon Web Services, commencement of high-volume silicon photonics production for AI infrastructure, and a Physical AI collaboration with NVIDIA. Management framed the improved outlook as the direct result of these demand and production developments.
Analysts took note. Jefferies reiterated a Buy rating and kept a EUR 74.00 price target on the stock, highlighting that roughly two-thirds of the upgraded data center revenue guidance is expected to come from optical components. Jefferies specified that those optical components include microcontrollers, silicon photonic PICs, and BiCMOS EICs, with the remaining one-third of the uplift coming from power chips.
The company-specific news arrived against a broadly positive European market backdrop. The pan-European STOXX 600 index rose 0.7% on the day, led by the technology sector, which gained 2.4%. Peer names tied to AI and infrastructure, including Infineon and Schneider Electric, also advanced during the session, reflecting broader sector enthusiasm for AI infrastructure plays. An expected European Central Bank rate decision added a macroeconomic element to trading, but the STMicroelectronics announcement dominated market moves for the stock.
Shares of STMicroelectronics became the top performer on the CAC 40 for the trading day, reaching their highest level since September 2000. The stock closed at a new 52-week high of 65.34, reflecting a convergence of a transformational guidance upgrade, strong analyst backing, and a supportive sector rally tied to AI infrastructure demand.
Bottom line - The company has raised its 2026 data center revenue ambition to roughly $1 billion and indicated the potential for another doubling in 2027. The guidance rests on AI infrastructure demand and capacity ramp progress, with a large portion of the upgraded revenue expected to come from optical components.