Apple supplier STMicroelectronics shares surged after the European chipmaker reported strong first-quarter sales and forecast accelerating revenue growth from artificial intelligence in the coming months, as tech giants continue pouring billions into data centers.
The company, whose major clients include Apple as well as Elon Musk’s Tesla and SpaceX, said revenue rose 23% year-over-year to $3.10 billion. That figure topped the company’s guidance of approximately $3.04 billion and analysts’ consensus estimate of $3.06 billion, according to Visible Alpha.
Mauro Orru for The Wall Street Journal:
Chief Executive Jean-Marc Chery said personal electronics and other equipment had led growth in the quarter, flagging improving demand, strong bookings and normalized inventory despite macroeconomic uncertainty. For the current quarter, the company is forecasting revenue of about $3.45 billion, above a Visible Alpha estimate of $3.18 billion.
STMicroelectronics shares in Paris jumped as much as 10% Thursday. The stock price has more than doubled over the past 12 months.“
AI is an opportunity for STMicroelectronics to turn the page after several quarters marred by a slow automotive business—a key end-market for a company that supplies to Tesla, German parts supplier Continental and Israel’s Mobileye.
The auto industry has been an Achilles’ heel for STMicroelectronics in recent years as carmakers have been slowly digesting chip inventories they built at the height of the pandemic.
MacDailyNews Note: STMicroelectronics reported a quarterly net profit of $37 million, down from $56 million a year earlier. Its gross profit rose to $1.05 billion from $841 million, resulting in a 33.8% gross margin. Analysts had expected net profit of $150.5 million and gross profit of $1.03 billion, according to Visible Alpha.
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