STMicroelectronics (STM) Stock: Data-Center Revenue Target Raised to $1 Billion for 2026

TLDR

• STMicroelectronics raised its 2026 data-center revenue target to ~$1 billion, up from “nicely above $500 million”
• The company expects data-center revenue to double again in 2027
• STM stock jumped 11% on Tuesday following the updated guidance
• STMicro holds a 90% market share in chips for SpaceX satellites and has worked with the company since 2015
• Despite the 168% YTD surge, one valuation model puts the stock 38.6% above its DCF fair value estimate

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STMicroelectronics stock climbed 11% on Tuesday after the company raised its revenue targets for its data-center business, citing strong demand driven by AI infrastructure spending.

STMicroelectronics N.V., STM

The Swiss chipmaker now targets data-center revenue of roughly $1 billion in 2026. That’s up from its previous guidance of “nicely above $500 million.” For 2027, the company expects that figure to double year over year — an upgrade from earlier guidance of “well above $1 billion.”

STM was trading around €62.82 at the time of the recent valuation analysis, and the stock is up 168% year to date as of early June 2026.

The auto chip market, which STMicro has long depended on, has been sluggish for over a year. The company has been making up for that by pivoting toward power-chip solutions and optical cable products used in data centers — both of which have become important parts of the AI hardware supply chain.

SpaceX Connection Adds Another Growth Layer

STMicro has been making chips for SpaceX satellites since 2015 and claims a 90% market share in that segment. With SpaceX widely expected to go public this month, that relationship has drawn renewed attention from investors.

The company is also in early discussions about orbital data centers — computing infrastructure located in space. Remi El-Ouazzane, who oversees that product group at STMicro, described it as “something that we are very much involved with but have not been able to scope properly yet.”

That’s one to watch, but no revenue guidance has been attached to it yet.

The broader analog chip sector moved higher alongside STMicro on Tuesday. ON Semiconductor rose 5.6%, Texas Instruments gained 2.5%, and Infineon Technologies added 5.9% in U.S. trading.

Valuation Questions After a 168% Run

After such a sharp move, some analysts are now questioning whether the stock has run ahead of its fundamentals.

Simply Wall St’s DCF model puts STMicro’s intrinsic value at €45.32 per share — suggesting the stock, at €62.82, may be trading 38.6% above that estimate.

The firm gives STMicro a valuation score of just 2 out of 6, which puts it in overvalued territory on that framework.

On a price-to-sales basis, the picture is more mixed. STM trades at a P/S of 5.20x, which sits above the semiconductor industry average of 4.88x but below the peer group average of 6.34x. Simply Wall St’s proprietary “Fair Ratio” for the stock sits at 11.87x — which would actually imply the stock is undervalued on that model.

The latest twelve-month free cash flow remains negative at approximately -$702 million, though analysts project a swing to roughly $967 million in 2026, growing to $3.47 billion by 2030.

The 6.6% gain over the past seven days and 28.1% over the past 30 days show the momentum is still running hot heading into the summer.

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