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STM Raises Data Center Outlook: Can AI Infrastructure Drive Growth?
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Key Takeaways
STM raises its 2026 data center revenue target to about $1B from "nicely above $500M".
STMicroelectronics says data center revenues could double in 2027 if demand trends and engagements persist.
STM's Q1 comm equipment & peripherals revenues rose 41% YoY, driven by AI data center infrastructure demand.
STMicroelectronics N.V. (STM - Free Report) is raising its data center revenue ambition, underscoring the growing role of AI infrastructure demand in its revenue outlook. The opportunity is tied less to direct participation in GPUs and more to the semiconductor content required to power, connect and secure AI data centers.
STM now expects data center revenues of about $1 billion in 2026, compared with its earlier expectation of “nicely above $500 million.” If current demand trends and customer engagements continue, the company said data center revenues could double in 2027, compared with its prior expectation of “well above $1 billion.” The higher target reflects continued AI infrastructure-led demand and progress on capacity ramp-up.
STM’s data center opportunity spans several parts of its portfolio, including silicon and silicon-carbide power solutions, 800-volt DC power conversion, silicon photonics, optical interconnect, high-performance microcontrollers, analog products and secure elements. In the first quarter, STM’s Communication Equipment and Computer Peripherals revenues rose 41% year over year, supported by stronger demand for AI data center infrastructure. The company also pointed to expanded engagement with Amazon Web Services, its NVIDIA collaboration on 800-volt DC power conversion and high-volume production of the PIC100 silicon photonics platform as key parts of its data center ramp.
STM’s expected data center revenue mix also points to a broader opportunity across its portfolio. The company indicated that its 2026 data center revenues are expected to be split roughly 40% from analog and power and 60% from microcontrollers and RF/optical cable, highlighting exposure across power delivery, embedded control and optical connectivity.
For STM, the data center opportunity will likely depend on whether strong AI infrastructure demand can move beyond customer engagements and into sustained revenue conversion. Broader exposure across power, optical connectivity and embedded control can widen the company’s growth runway, but the financial impact will likely rest on how effectively STM scales capacity and executes across these programs. If execution progresses, data centers could become a more visible contributor to STM’s revenue mix and growth profile.
How STM’s Data Center Revenue Ambition Stacks Up
ON Semiconductor Corporation (ON - Free Report) provides a relevant comparison because the company is also expanding its AI data center exposure through power efficiency, power density and broader power-tree content. In the first quarter of 2026, ON’s AI data center revenues grew more than 30% sequentially and doubled year over year. The company generated about $250 million in AI revenues last year and now expects that revenue stream to double to roughly $500 million in 2026, supported by engagements with major power supply vendors serving leading AI hyperscalers.
Navitas Semiconductor Corporation (NVTS - Free Report) offers a more focused comparison around next-generation power architecture. The company is repositioning around high-power markets, including AI data centers, grid infrastructure, performance computing and industrial electrification, which together represent a serviceable addressable market of $3.5 billion by 2030. NVTS is targeting GaN and high-voltage SiC opportunities tied to 800-volt HVDC data center architectures, including AC-DC and DC-DC power conversion for higher-density AI infrastructure.
Against this backdrop, STM’s data center opportunity stands out for its combination of scale and portfolio breadth. ON highlights the near-term revenue potential tied to AI data center power demand, while NVTS reflects the shift toward GaN and SiC content in high-voltage data center architectures. STM’s differentiation rests on combining power, silicon photonics, optical interconnect and embedded control within a wider data center portfolio.
STM’s Price Performance, Valuation & Estimates
Shares of STMicroelectronics have surged 209.8% over the past year compared with the industry’s rise of 66.1%.
STM’s Stock One-Year Price Performance
Image Source: Zacks Investment Research
STMicroelectronics stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-sales (P/S) multiple of 4.76, well below the industry average of 11.37.
STM’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for STM’s 2026 earnings implies a year-over-year increase of 105.7%. Earnings per share estimates for 2026 have remained unchanged in the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
STM Raises Data Center Outlook: Can AI Infrastructure Drive Growth?
Key Takeaways
STMicroelectronics N.V. (STM - Free Report) is raising its data center revenue ambition, underscoring the growing role of AI infrastructure demand in its revenue outlook. The opportunity is tied less to direct participation in GPUs and more to the semiconductor content required to power, connect and secure AI data centers.
STM now expects data center revenues of about $1 billion in 2026, compared with its earlier expectation of “nicely above $500 million.” If current demand trends and customer engagements continue, the company said data center revenues could double in 2027, compared with its prior expectation of “well above $1 billion.” The higher target reflects continued AI infrastructure-led demand and progress on capacity ramp-up.
STM’s data center opportunity spans several parts of its portfolio, including silicon and silicon-carbide power solutions, 800-volt DC power conversion, silicon photonics, optical interconnect, high-performance microcontrollers, analog products and secure elements. In the first quarter, STM’s Communication Equipment and Computer Peripherals revenues rose 41% year over year, supported by stronger demand for AI data center infrastructure. The company also pointed to expanded engagement with Amazon Web Services, its NVIDIA collaboration on 800-volt DC power conversion and high-volume production of the PIC100 silicon photonics platform as key parts of its data center ramp.
STM’s expected data center revenue mix also points to a broader opportunity across its portfolio. The company indicated that its 2026 data center revenues are expected to be split roughly 40% from analog and power and 60% from microcontrollers and RF/optical cable, highlighting exposure across power delivery, embedded control and optical connectivity.
For STM, the data center opportunity will likely depend on whether strong AI infrastructure demand can move beyond customer engagements and into sustained revenue conversion. Broader exposure across power, optical connectivity and embedded control can widen the company’s growth runway, but the financial impact will likely rest on how effectively STM scales capacity and executes across these programs. If execution progresses, data centers could become a more visible contributor to STM’s revenue mix and growth profile.
How STM’s Data Center Revenue Ambition Stacks Up
ON Semiconductor Corporation (ON - Free Report) provides a relevant comparison because the company is also expanding its AI data center exposure through power efficiency, power density and broader power-tree content. In the first quarter of 2026, ON’s AI data center revenues grew more than 30% sequentially and doubled year over year. The company generated about $250 million in AI revenues last year and now expects that revenue stream to double to roughly $500 million in 2026, supported by engagements with major power supply vendors serving leading AI hyperscalers.
Navitas Semiconductor Corporation (NVTS - Free Report) offers a more focused comparison around next-generation power architecture. The company is repositioning around high-power markets, including AI data centers, grid infrastructure, performance computing and industrial electrification, which together represent a serviceable addressable market of $3.5 billion by 2030. NVTS is targeting GaN and high-voltage SiC opportunities tied to 800-volt HVDC data center architectures, including AC-DC and DC-DC power conversion for higher-density AI infrastructure.
Against this backdrop, STM’s data center opportunity stands out for its combination of scale and portfolio breadth. ON highlights the near-term revenue potential tied to AI data center power demand, while NVTS reflects the shift toward GaN and SiC content in high-voltage data center architectures. STM’s differentiation rests on combining power, silicon photonics, optical interconnect and embedded control within a wider data center portfolio.
STM’s Price Performance, Valuation & Estimates
Shares of STMicroelectronics have surged 209.8% over the past year compared with the industry’s rise of 66.1%.
STM’s Stock One-Year Price Performance
Image Source: Zacks Investment Research
STMicroelectronics stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-sales (P/S) multiple of 4.76, well below the industry average of 11.37.
STM’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for STM’s 2026 earnings implies a year-over-year increase of 105.7%. Earnings per share estimates for 2026 have remained unchanged in the past 30 days.
EPS Trend of STM Stock
Image Source: Zacks Investment Research
STM stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.