BofA Names Preferred Picks Among European Chipmakers Ahead of Earnings
BofA Securities prefers STMicroelectronics, Infineon, Tower Semiconductor, and Nordic Semiconductor ahead of earnings, expecting modest beats and raises. STMicroelectronics may raise data center revenue guidance to $3B for 2027. Infineon's AI and server CPU power revenues are estimated at €4.1B. Nordic Semiconductor is rated Buy due to EBITDA improvement. Melexis is underperforming due to weaker demand and auto growth lag.
How this was made
The 30-second read
Why it matters
The note provides fresh analyst preference and earnings expectations, offering traders a basis to position ahead of the upcoming earnings season.
Market read
Analyst recommendations ahead of earnings can drive short‑term price moves for the highlighted chipmakers.
What to watch
Potential supply‑chain constraints and geopolitical risks in Europe could dampen the expected pricing improvements.
Background
BofA Securities released an analyst note recommending four European semiconductor companies ahead of their earnings releases, contrasting them with Melexis, which is underperformed.
Ticker impact
BofA recommends STM as a preferred pick ahead of its earnings, expecting modest beat and margin upside.
likely modest upside as investors price in a beat and margin improvement.
Analyst expects flat‑to‑up pricing and margin expansion, which could lift the stock if confirmed.
BofA includes Tower Semiconductor among its top picks, expecting a modest earnings beat with limited margin upside.
likely limited upside as margin expansion is constrained.
Analyst notes limited upside beyond modest beat, so price move will be modest.
Market effects
Highlights modest growth expectations for European chipmakers, may influence sector sentiment.
European semiconductor stocks could see modest re‑rating ahead of earnings.
Limited; primarily affects investors focused on the European chip sector.
Counterpoint
If margins remain constrained, the modest upside may be overstated; a more cautious stance could be warranted.
Key entities
- analyst_firmBofA Securities
Provides the preferred picks and earnings expectations.
- companySTMicroelectronics
Preferred pick with modest beat expectation.
- companyInfineon
Preferred pick with AI revenue upside.
- companyTower Semiconductor
Preferred pick with limited margin upside.
- companyNordic Semiconductor
Buy rating due to EBITDA margin improvement.
