STMicro Q1 AI demand

STMicroelectronics said first-quarter revenue rose 23% to $3.10 billion as it pushed deeper into chips for artificial intelligence data centers. (newsroom.st.com) The company reported gross margin of 33.8%, operating income of $70 million and net income of $37 million for the quarter ended March 28, 2026. ST also guided for second-quarter revenue of about $3.45 billion at the midpoint, up 11.6% from the first quarter. (newsroom.st.com) Chief executive Jean-Marc Chery said ST now expects data-center revenue to come in “nicely above” $500 million in 2026 and “well above” $1 billion in 2027. The company tied that outlook to “new AI driven programs” and products for “the evolving AI infrastructure.” (live.euronext.com) ST is better known for automotive and industrial chips than for the graphics processors that train large AI models. In the first quarter, management said automotive revenue fell 10% from the prior quarter, while industrial revenue slipped 1% sequentially and distribution inventory returned to normal levels. (investors.st.com) That mix matters because ST has spent the past two years working through a slowdown in car and factory chips after customers built up excess inventory. Reuters reported on April 23 that investors treated the results as a sign of recovery in ST’s core markets, sending the shares up as much as 10% in early trading before they eased to an 8.5% gain by 0800 GMT. (finance.yahoo.com) The company has been laying groundwork for that shift. On February 9, 2026, ST said it had expanded its relationship with Amazon Web Services through a multi-year, multi-billion-dollar commercial engagement to supply several product categories for cloud and AI data-center infrastructure. (newsroom.st.com) ST has also been building the parts around AI servers, not just the processors at the center of them. The company said in March that it had entered high-volume production of its silicon photonics platform, which uses light to move data between chips and systems inside AI infrastructure. (st.com) The quarter still showed the cost of that repositioning. ST said free cash flow was negative $723 million, including an $895 million cash payment tied to its acquisition of NXP’s MEMS sensor business, even as bookings ran above shipments across all end markets. (investors.st.com) For ST, the immediate test is whether AI-linked orders can keep outpacing the slower automotive rebound. The company’s second-quarter forecast and its 2026 to 2027 data-center targets put that bet in numbers investors can track. (newsroom.st.com)