STMicroelectronics dropped 15.1% on July 23, hitting €49.47 by midday in Paris after the chipmaker posted second-quarter core earnings that badly missed Wall Street expectations. The previous close had been €58.27. Even after that bruising session, the stock remains more than 110% above its January level.
The number that upset investors was EBITDA of $679 million for Q2, against a consensus estimate of $797.7 million. Management pinned the shortfall on a cluster of one-off costs: impairment charges, restructuring expenses, product phase-out fees, and accounting effects tied to the acquisition of an NXP sensor business. Underlying revenue actually beat forecasts, and demand signals across the company's end markets looked healthier than feared.
Third-quarter revenue guidance came in at roughly $3.70 billion, plus or minus 3.5%. Analysts polled by LSEG had penciled in $3.72 billion, so the miss was marginal but enough to sting. Jefferies flagged a possible link to a slower production ramp for Apple's anticipated iPhone 18, while noting that gross margin guidance and the Q4 outlook could support a stronger run into 2027.
Data Center Numbers That Stand Out
The Franco-Italian semiconductor maker used the results to sharpen its data center projections in a meaningful way. Revenue from that segment is now expected to top $1 billion in 2026 and climb to well above $2 billion in 2027, assuming current customer programs and demand conditions hold.
CEO Jean-Marc Chery said booking strength spread across every end market during the quarter, with supply constraints beginning to appear in several product categories. The fourth quarter is expected to accelerate, driven by AI data center programs and low-Earth-orbit satellite communications, with management targeting Q4 revenue above $4 billion.
The core tension for shareholders is whether that data center ramp can compensate for persistent weakness in the automotive and industrial segments, which still account for a large share of the company's revenue base.
ST shares pared some losses in afternoon trading but stayed firmly in negative territory at the close.
This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any security.
