By Nate Wolf
Shares of STMicroelectronics rose sharply Tuesday after the chip maker lifted its revenue targets for 2026 and 2027 thanks to the boom in data-center spending.
The Swiss company now expects data-center revenue of roughly $1 billion in 2026, up from a previous target of "nicely above $500 million." Data-center revenue could then double year over year in 2027, compared to management's earlier guidance of "well above $1 billion."
STMicroelectronics stock jumped 10% in premarket trading.
The updated guidance is another example of how chip makers, even those not directly building artificial-intelligence processors, have been turning to data centers to overcome weakness in other parts of the market.
STMicro is perhaps best known for producing semiconductors used in cars -- a market that has struggled over the last year. It is compensating for the stagnant auto market by making power-chip solutions and optical cable for data centers. Both products have become critical parts of the AI supply chain.
The stock has climbed 166% this year thanks to those trends.
It may get another boost from SpaceX as Elon Musk's rocket company, which is expected to go public this month, tries grow rapidly to satisfy investors' lofty expectations.
STMicro has worked with SpaceX to make chips for satellites since 2015 and claims a 90% market share in the space. The company sees that market growing in the next few years, but that guidance doesn't even include Musk's vision of data centers in space.
The orbital data centers are "something that we are very much involved with but have not been able to scope properly yet," Remi El-Ouazzane, who oversees that product group for STMicro, said at an investor conference Tuesday.
Write to Nate Wolf at nate.wolf@barrons.com
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(END) Dow Jones Newswires
June 02, 2026 09:09 ET (13:09 GMT)
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