STMicroelectronics (NYSE: STM), a global semiconductor company, reported strong financial results for the second quarter of 2026, supported by improving demand across key markets and continued momentum in automotive, consumer electronics, and artificial intelligence (AI) infrastructure. The company also raised its revenue outlook for AI data center applications, reflecting growing customer demand.
For the quarter ended June 27, 2026, STMicroelectronics posted net revenues of $3.49 billion, while gross margin stood at 34.8%. Operating income came in at $187 million, and net income reached $222 million, translating into diluted earnings per share of $0.24. On a non-US GAAP basis, gross margin was 35.2%, operating income was $269 million, and net income stood at $291 million, or $0.31 per diluted share.
The company recorded a 26% year-on-year increase in revenue, driven by stronger demand in the Automotive and Consumer Electronics, Communication and Computer Peripherals (CECP) segments. Business activity improved across all major end markets during the quarter, with higher customer bookings and better visibility for future demand.
STMicroelectronics said inventory levels within its distribution network have now returned below the company’s standard target, indicating healthier market conditions and improving supply-demand balance. The company also reported signs of tight supply across several product categories as customer demand continued to strengthen.
Looking ahead, ST expects further growth during the third quarter. At the midpoint of its guidance, the company forecasts Q3 2026 revenue of approximately $3.70 billion, representing sequential growth of around 6.2% and year-on-year growth of about 16.2%. Gross margin is projected at 37%, including approximately 70 basis points of unused capacity charges.
The company also expects business momentum to accelerate further during the fourth quarter, supported primarily by growing demand from AI data centers and Low Earth Orbit (LEO) satellite communication programs. Revenue in the final quarter of the year is expected to exceed $4 billion, resulting in second-half growth well above normal seasonal trends.
Reflecting continued demand from AI infrastructure customers, STMicroelectronics has increased its revenue expectations for its data center business. The company now expects AI data center revenue to exceed $1 billion in 2026 and projects it to surpass $2 billion in 2027, supported by ongoing customer engagements and expanding deployment of AI computing platforms.
Jean-Marc Chery, President and Chief Executive Officer of STMicroelectronics, said the company delivered revenue above the midpoint of its guidance during the second quarter, supported by strong performances in automotive and CECP businesses. He added that demand strengthened across all end markets, while customer bookings improved significantly, providing greater confidence for the second half of the year.
With more than 49,000 employees worldwide, STMicroelectronics serves over 200,000 customers across automotive, industrial, communications, consumer electronics, and cloud infrastructure markets. The company continues to invest in advanced semiconductor technologies while pursuing its sustainability targets, including achieving carbon neutrality in direct operations and sourcing 100% renewable electricity by the end of 2027.
