STMicro raises data-centre expectations after profit miss, shares tank

The company reported second-quarter revenue of $3.49 billion, ahead of analysts' average estimate of $3.39 billion, according to LSEG data.

However, its earnings before interest, taxes, depreciation and amortization were $679 million, well below market expectations of $797.7 million.

STMicro said the hit to profit came from impairment, restructuring and other phase-out costs. It also cited accounting effects from its acquisition of an NXP sensor business.

The company raised its revenue ambition for data centres, saying it now expected the business to generate more than $1 billion in 2026 and well above $2 billion in 2027, assuming current demand trends and customer engagements continue.

"While the Q3 revenue guidance missed perhaps because of a slower iPhone 18 ramp, the strong gross margin guidance and Q4 outlook points to a better than expected 2027," Jefferies analysts wrote in an early take note.