STMicroelectronics Reports Q2 2026 Results: Full Earnings Call Transcript - STMicroelectronics (NYSE:STM)

STMicroelectronics (STM) reports strong Q2 2026 results, with a 50% YoY revenue increase in Communication Equipment & Computer Peripherals. The company expects datacenter revenues to exceed $1B in 2026 and $2B in 2027, driven by AI infrastructure demand. STM is investing heavily in optical interconnect and power solutions, facing competition from Broadcom and Monolithic Power Systems. STM's stock has surged 115% YTD, with a forward P/E of 25.04.

STMicroelectronics (STM) shares fell after Q3 revenue guidance missed expectations. The company reported operating cash flow of $502 million versus $354 million a year earlier and turned free cash flow positive, with Q2 2026 FCF of $75 million. STM expects data center revenue above $1 billion in 2026 and $2 billion in 2027, and analysts cite a $79.07 mean target.

STMicroelectronics reported Q2 industrial revenue up 20% sequentially and 34% year over year, and personal electronics revenue up 3% sequentially and 20% year over year. Management raised its data center revenue ambition to above $1B in 2026 and well above $2B in 2027, citing optical connectivity and AI infrastructure. Q2 gross profit rose 31.1% to $1.22B, and EPS was $0.24. Q3 revenue guidance is $3.7B plus or minus 350 bps.

STMicroelectronics (STM) reported Q2 2026 net revenue of $3.49 billion, up 23.3% year over year, with gross margin at 34.8% and non-U.S. GAAP EPS of $0.31. Inventory fell to $3.19 billion. Free cash flow was $75 million. Management guided Q3 revenue to $3.7 billion (midpoint) and Q4 revenue above $4 billion, citing AI-driven communication demand.

US equity futures were softer as STMicroelectronics missed Q3 revenue guidance and Alphabet raised AI capex guidance, while Tesla pre-market fell after results. Alphabet reported Q2 revenue $119.8bn and capex $44.92bn, raising FY26 capex to $195bn-$205bn. Tesla reported adj. EPS 0.33 and gross margin 16.8%. FX and rates were pressured by higher Brent and ECB/CBRT focus.

European semiconductor stocks diverged after earnings. Soitec jumped about 23% after beating sales expectations and guiding Q2 revenue growth above 30%, with Photonics-SOI revenue expected to more than double from slightly above $100 million. STMicroelectronics fell about 15% on weaker-than-expected profit, and Besi dropped around 3% despite strong orders. Nokia was little changed after a profit beat, citing strong AI-related demand but ongoing supply constraints.