STM

Analog Devices ADI is scheduled to report third-quarter fiscal 2026 results on Aug. 19. For the fiscal third quarter, Analog Devices expects revenues to be $3.9 billion (+/- $100 million). The Zacks Consensus Estimate for revenues is pegged at $3.92 billion, suggesting growth of 36.3% from the year-ago quarter’s reading. Analog Devices projects non-GAAP earnings to be $3.30 (+/-$0.15). The Zacks Consensus Estimate for earnings is pegged at $3.33 per share, indicating a rise of 62.4% from the year-ago quarter’s reported figure. The figure has been revised downward by a penny in the past 30 days. Image Source: Zacks Investment Research ADI beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 5.48%. Analog Devices, Inc. price-eps-surprise | Analog Devices, Inc. Quote Our proven model predicts an earnings beat for ADI this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here. Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($3.41 per share) and the Zacks Consensus Estimate ($3.33 per share), is +2.37%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. Zacks Rank: ADI carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Analog Devices is entering its third quarter of fiscal 2026 with broad-based demand momentum across its end markets. Record bookings in Industrial, Automotive and Communications, along with constructive order-book and backlog trends, are expected to have supported continued growth in the to-be-reported quarter. Industrial AI-related applications and Automotive are particularly strong areas. ADI’s Industrial business is likely to have remained a key growth driver in the third quarter of fiscal 2026. Aerospace and defense and automated test equipment continue to benefit from strong demand, while automation is gaining traction from the onshoring of advanced manufacturing, digital factory investments and rising adoption of next-generation robotics. Electronic test and measurement is also benefiting from demand tied to AI, electric vehicles and secure communications. Automotive is likely to have contributed to growth in the to-be-reported quarter. ADI continues to gain content and share in next-generation ADAS and infotainment systems, supported by demand for its connectivity, functionally safe power and audio technologies. Battery-management solutions for electric vehicles are expected to have returned to year-over-year growth, suggesting improving conditions across the automotive portfolio. Communications is likely to have been the fastest-growing end market in the third quarter of fiscal 2026, led by continued strength in data center applications. AI infrastructure investments are driving demand for ADI’s optical and power solutions, while the company is also seeing increasing demand in wireless. The momentum across both optical connectivity and power is expected to remain a significant tailwind in the to-be-reported quarter. Consumer is likely to have been the main area of relative moderation. The business has remained resilient, supported by ADI’s exposure to high-end consumer products and cyclical strength in its B2B-like prosumer business. However, management expects some impact from consumer sentiment, inflationary pressures and broader supply-chain considerations, which could result in softer momentum in the to-be-reported quarter. Analog Devices shares have gained 40.6% over the past year, underperforming the Zacks Semiconductor - Analog and Mixed industry’s growth of 41.9%. Image Source: Zacks Investment Research Let us now look at the value Analog Devices offers to its investors at current levels. ADI is currently trading at a premium with a forward 12-month price-to-sales (P/S) of 11.39X compared with the industry’s 8.64X. Image Source: Zacks Investment Research ADI is experiencing broad-based growth across all four of its end markets, with Industrial and Communications emerging as the leading growth drivers. In the second quarter of fiscal 2026, the Industrial segment remained the largest contributor, generating $1.80 billion in revenues, or 50% of total revenues, up 56% year over year. ADI’s industrial growth was supported by strength across industrial applications, including aerospace and defense, automated test equipment, energy management and the broader industrial market. Communications was the fastest-growing segment, with revenues of $554.7 million, which represented 15% of total revenues and increased 79% year over year, driven by strong demand from data center and communications infrastructure applications. Automotive revenues reached $871.6 million, accounting for 24% of total revenues and rising 2% year over year, reflecting a more gradual recovery in automotive demand. Meanwhile, Consumer generated $397.8 million, or 11% of total revenues, up 23% year over year, supported by improving demand across consumer electronics applications. Overall, Industrial and Communications are the key growth engines for ADI, while improving trends in Consumer and relatively stable Automotive demand provide additional support to the company’s broad-based recovery. However, ADI also experiences stiff competition from Texas Instruments TXN, STMicroelectronics STM and NXP Semiconductors NXPI. Texas Instruments competes across analog, digital and mixed-signal solutions, including precision sensing and power-management products for consumer electronics. NXP Semiconductors is a major provider of analog and mixed-signal semiconductor solutions for mobile, connectivity and consumer applications, including front-end, power-management and mixed-signal products, particularly for mobile and IoT markets. Texas Instruments also targets the automotive market through analog sensors, power ICs, in-vehicle networking and signal-chain products, as well as driver-assistance electronics. STMicroelectronics competes with ADI through products including MEMS and inertial sensors, analog front ends, interface ICs and microcontrollers. While competition from these major semiconductor players has prompted ADI to increase research and development as well as sales and marketing investments at double-digit rates, strong revenue growth has helped the company maintain its margins. Despite constant competitive pressure, ADI has been able to sustain its market share and margins. Analog Devices enters its third-quarter fiscal 2026 results with strong momentum across its key end markets, supported by robust Industrial and Communications demand and improving trends in Automotive and Consumer. Although ADI’s premium valuation and intense competition from major analog semiconductor players remain concerns, its broad-based growth, strong market position and exposure to secular trends, such as AI infrastructure, automation and electrification, support the long-term outlook. Given these factors, investors may consider accumulating ADI at present. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Texas Instruments Incorporated (TXN) : Free Stock Analysis Report STMicroelectronics N.V. (STM) : Free Stock Analysis Report NXP Semiconductors N.V. (NXPI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Amtech Systems ASYS, a manufacturer of equipment and consumables enabling AI semiconductor device packaging and advanced substrate fabrication, reported its third-quarter fiscal 2026 results on Aug. 5.The company’s quarterly results surpassed the Zacks Consensus Estimate for both the top and bottom lines. Revenues posted healthy year-over-year growth of 14.5%, beating the Zacks Consensus Estimate by 4.11%. Earnings of 14 cents per share beat the Zacks Consensus Estimate of 10 cents.Strong AI-driven demand is powering double-digit revenue growth, expanding margins, improving profitability, robust bookings and a significantly stronger balance sheet. The TPS business continues to benefit from accelerating AI infrastructure and advanced packaging investments.However, what stance should investors take on this stock? Does its recent strong performance provide a compelling enough reason to buy, or are there potential challenges investors need to consider? Let's examine in detail. Amtech Systems delivered a solid fiscal third quarter, with revenues rising 14.5% year over year to $22.4 million, reaching the high end of management's guidance. The growth was primarily driven by robust demand for AI-related equipment in the Thermal Processing Solutions (TPS) segment, underscoring the company's increasing exposure to AI infrastructure investments.TPS remained ASYS' primary growth engine during the quarter. Segment revenues increased 24.9% year over year to approximately $17.7 million, supported by strong demand for advanced packaging equipment, AI server board assembly solutions, and higher parts and services revenues. AI-related revenues in the quarter increased by roughly 120% from the prior-year period, highlighting the company's growing exposure to AI infrastructure spending.Profitability also improved meaningfully. Gross margin expanded 330 basis points year over year to 50%, benefiting from a higher-margin product mix and Amtech Systems' semi-fabless operating model. GAAP net income increased to $1.7 million from $0.1 million a year ago, while adjusted EBITDA reached $3.3 million, exceeding management's guidance.Demand remained healthy beyond the reported quarter. Customer orders increased to $28.8 million from $21.1 million in the prior quarter, while backlog expanded to $28.7 million from $22.3 million. The TPS segment generated a strong book-to-bill ratio of 1.37, indicating orders continued to outpace shipments. Management expects a significant portion of the backlog to convert into revenues during fiscal fourth quarter 2026 and the first half of fiscal 2027, providing healthy revenue visibility.Looking ahead, management expects fiscal fourth-quarter revenues of $22.5-$24.0 million and anticipates continued strength in AI-related demand. Supported by disciplined spending, operating leverage and a healthy backlog, the outlook suggests the company is well positioned to sustain its recent momentum. Amtech Systems shares have surged 208.2% over the past year, significantly outperforming the Zacks Semiconductor - General industry's 27.2% gain, the broader Zacks Computer & Technology sector’s 29.5% rise and the S&P 500’s 23.5% return.ASYS' stellar share price performance has outpaced that of several semiconductor peers, including STMicroelectronics STM, Texas Instruments Incorporated TXN and NVIDIA NVDA. Over the same period, shares of STMicroelectronics, Texas Instruments and NVIDIA have gained 111.7%, 48.7% and 19.8%, respectively. Image Source: Zacks Investment Research Despite Amtech Systems’ solid third-quarter fiscal 2026 performance, the continued weakness in its Semiconductor Fabrication Solutions (SFS) business remained a significant concern. SFS revenues declined 13.3% year over year to approximately $4.6 million, primarily due to very weak demand for products supporting silicon carbide (SiC) wafer production. While the Thermal Processing Solutions (TPS) segment benefited from booming AI-related demand, management acknowledged that the SFS business continued to weigh on overall performance.Management has adopted a cautious stance regarding the prospects of this segment; they have stated that they do not anticipate any significant recovery in the demand for silicon carbide due to structural changes within the industry. Instead, the company is focusing on cost controls, expanding its specialty chemicals business, and growing recurring parts and services revenue to stabilize SFS. The stock is currently trading below the 50-day moving average, indicating a bearish trend. Image Source: Zacks Investment Research ASYS' valuation remains a key concern. The stock is currently trading at a trailing 12-month price-to-earnings (P/E) multiple of 71.19X, well above the industry average of 41.49X. Moreover, ASYS carries a Zacks Value Score of D, suggesting that the stock is not so cheap and is overvalued at this moment. Because the trailing P/E is based on the company's reported earnings over the past four quarters, it offers a fact-based assessment of valuation. The premium multiple suggests the market has already priced in much of Amtech Systems’ growth potential, increasing downside risk.Meanwhile, STMicroelectronics, Texas Instruments and NVIDIA are trading lower at 62.82X, 42.27 and 38.66X, respectively. Image Source: Zacks Investment Research Amtech Systems is executing well, with AI-driven demand supporting strong revenue growth, expanding margins, improving profitability and a healthy backlog. However, the continued weakness in its SFS business, premium valuation and shares trading below the 50-day moving average warrant caution. Existing investors may consider holding the stock while monitoring whether AI-driven execution continues to offset the structural challenges in SFS and justify the elevated valuation. For new investors, staying on the sidelines until the risk-reward profile becomes more favorable may be a wise approach.ASYS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amtech Systems, Inc. (ASYS) : Free Stock Analysis Report Texas Instruments Incorporated (TXN) : Free Stock Analysis Report STMicroelectronics N.V. (STM) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Amtech Systems ASYS is set to report its third-quarter fiscal 2026 results on Aug. 5.The company projects third-quarter fiscal 2026 revenues of $20.5-$22.5 million. At the midpoint of the guidance range, revenues are expected to post meaningful year-over-year and sequential growth.The Zacks Consensus Estimate for third-quarter fiscal revenues is currently pegged at $21.5 million, indicating a 9.92% increase from the figure reported in the year-ago quarter.The consensus mark for earnings is pegged at 10 cents per share, unchanged over the past 30 days. This projection indicates growth of 66.67% from the year-ago quarter’s reported figure. Image Source: Zacks Investment Research Amtech’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an impressive average earnings surprise of 162.8%. Amtech Systems, Inc. price-eps-surprise | Amtech Systems, Inc. Quote Our proven model does not conclusively predict an earnings beat for Amtech this time. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here, as you can see below.Amtech has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. Amtech’s exposure to AI semiconductor packaging continued to expand as demand for advanced packaging and AI server board assembly equipment remained robust during the quarter. The company highlighted strong bookings for AI applications, supported by its differentiated TrueFlat technology and superior temperature uniformity, while expecting AI-related sales to exceed 40% of Thermal Processing Solutions revenues in the fiscal third quarter. These trends indicate that accelerating AI infrastructure investments likely boosted order conversion and product shipments, enabling the company to deliver stronger revenue growth and an improved sales mix during the quarter to be reported.Amtech's business transformation continued to improve operating leverage through product-line rationalization, a semi-fabless manufacturing model and a greater mix of higher-margin AI advanced packaging equipment and recurring parts and services. Management noted that these initiatives expanded gross margins, strengthened cash generation and enabled the company to support higher production with little or no incremental capital expenditure. In addition, Amtech guided for fiscal third-quarter revenues of $20.5-$22.5 million and adjusted EBITDA margins in the low double digits, reflecting the benefits of structural cost reductions and recurring revenues. Consequently, these factors are expected to have strengthened profitability and operating leverage in the quarter under review.Amtech continued investing in next-generation advanced packaging solutions to address higher-density semiconductor applications as customer interest in panel-level packaging increased through stronger quoting activity and bookings. The company planned to launch its first higher-density packaging system at the SEMICON Taiwan trade show in early September, noting that the new platform would significantly expand ASYS’ addressable market and support emerging customer requirements. Backed by robust AI infrastructure demand and ongoing technology innovation, this product introduction is expected to have strengthened customer engagement, expanded growth opportunities and supported commercial momentum during the fiscal third quarter.However, the company highlighted that escalating geopolitical tensions, including the conflict involving Iran, could disrupt semiconductor supply chains through higher energy costs, shipping delays, trade restrictions and weaker customer capital spending. Given Amtech's significant exposure to Asian semiconductor customers and globally integrated supply chains, these uncertainties could delay equipment shipments or customer investment decisions. Therefore, geopolitical and supply-chain disruptions are anticipated to have created headwinds for third-quarter fiscal 2026 revenue visibility and execution. Despite gaining 22.3% year to date, outperforming the industry’s 14.8% rise and the sector’s 11.7% increase, Amtech has trailed several leading semiconductor peers. Intel INTC, STMicroelectronics STM and Texas Instruments TXN have significantly outperformed, with their shares surging 144.5%, 102% and 59%, respectively, over the same period. While ASYS has delivered solid returns, investors may view the stronger stock performance of Intel, STMicroelectronics and Texas Instruments as evidence that these peers have benefited more from favorable trends in the semiconductor market. Image Source: Zacks Investment Research Amtech appears to offer an attractive entry point from a valuation perspective. The stock trades at a forward 12-month price-to-sales (P/S) ratio of 2.4X, well below the industry average of 9.26X. ASYS is also valued below key semiconductor peers, with Intel, STMicroelectronics and Texas Instruments trading at forward 12-month P/S multiples of 6.79X, 2.98X and 10.89X, respectively. This discounted valuation could appeal to investors seeking exposure to the semiconductor equipment space at a relatively attractive price. Image Source: Zacks Investment Research Amtech enters third-quarter fiscal 2026 with improving fundamentals, supported by strong AI-driven demand for advanced packaging equipment, robust bookings, expanding recurring parts and services revenues, higher gross margins and operating leverage from its semi-fabless manufacturing model. The planned launch of next-generation higher-density packaging equipment and growing panel-level packaging opportunities further strengthen its growth outlook. Yet, weak demand for certain silicon carbide-related products, limited order visibility due to short lead times and continued softness in parts of the Semiconductor Fabrication Solutions business remain headwinds. Amtech's AI-driven growth, improving margins, strong bookings and attractive valuation support its long-term outlook. However, limited order visibility, weakness in parts of its Semiconductor Fabrication Solutions business and geopolitical uncertainties may constrain near-term performance. While the company's long-term growth outlook remains encouraging, a hold stance on ASYS stock appears appropriate ahead of the third-quarter fiscal 2026 results.You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amtech Systems, Inc. (ASYS) : Free Stock Analysis Report Intel Corporation (INTC) : Free Stock Analysis Report Texas Instruments Incorporated (TXN) : Free Stock Analysis Report STMicroelectronics N.V. (STM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, July 23, 2026 at 3:30 a.m. ET EVP, Corporate Development and Integrated External Communications - Jerome Ramel ST President and Chief Executive Officer - Jean-Marc Chery President and CFO - Lorenzo Grandi President, Analog, Power and Discrete, MEMS and Sensors Group, and Head of STMicroelectronics Strategy, System Research and Applications and Innovation Office - Marco Cassis President of Microcontrollers, Digital ICs and RF Products Group - Remi El-Ouazzane Operator: Ladies and gentlemen, welcome to the STMicroelectronics Second Quarter 2026 Earnings Release Conference Call and Live Webcast. I am Moira, the Chorus Call operator. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Jerome Ramel, EVP, Corporate Development and Integrated External Communications. Please go ahead. Jerome Ramel: Thank you, Moira, and thank you, everyone, for joining our second quarter 2026 financial results call. Hosting the call today is Jean-Marc Chery, ST President and Chief Executive Officer. Joining Jean-Marc on the call are Lorenzo Grandi, President and CFO; Marco Cassis, President, Analog, Power and Discrete, MEMS and Sensors Group, and Head of STMicroelectronics Strategy, System Research and Applications and Innovation Office; and Remi El-Ouazzane, President of Microcontrollers, Digital ICs and RF Products Group. This live webcast and presentation materials can be accessed on ST Investor Relations website. A replay will be available shortly after the conclusion of this call. This call will include forward-looking statements that involve risk factors that could cause ST results to differ materially from management expectations and plans. We encourage you to review the safe harbor statement contained in the press release that was issued with the results this morning and also in ST's most recent regulatory filings for a full description of these risk factors. Also, to ensure all participants have an opportunity to ask questions during the Q&A session, please limit yourself to one question and a brief follow-up. Now I'd like to turn the call over to Jean-Marc Chery, ST President and CEO. Jean-Marc Chery: Thank you, Jerome. Good morning, everyone, and thank you for joining ST for our Q2 2026 earnings conference call. I will start with an overview of the second quarter, including business dynamics. And I will hand over to Lorenzo for the detailed financial overview. I will then comment on the outlook and conclude before answering your question. So starting with Q2. Our second quarter net revenues of $3.49 billion came in above the midpoint of our business outlook range, driven by higher revenues in Communication Equipment, Computer Peripherals and Automotive. Gross margin was 34.8% and non-U.S. GAAP gross margin was 35.2%. Both were in line with the midpoint of our business outlook range. Non-U.S. GAAP diluted earnings per share was $0.31. During the second quarter, inventory in our balance sheet remained flattish. In distribution, inventory further decreased and is now below our standard target. We generated a positive $75 million free cash flow. Let's now discuss our business dynamics during Q2. During the quarter, demand increased further with strong bookings and book-to-bill close to 2 overall. We were well above 1 in all end markets and significantly above 2 in Communication Equipment & Computer Peripherals, mostly driven by optical connectivity, including silicon photonics. We saw improved visibility and signs of tight supply in several product categories. In Automotive, revenues came in better than expected, increasing 14% sequentially and 16% year-over-year. This growth was driven by our solid position on application-specific ICs and sensors for conventional applications, electrical powertrain and ADAS. Automotive design momentum continued to build across multiple OEM and Tier 1 ecosystems. We secured design wins across hybrid, electric and conventional vehicles, including applications in onboard chargers, powertrain and active suspensions. These wins were across our application-specific ICs and sensors. Specifically, our smart power ICs wins include custom devices for airbags, electronic stability control and suspension applications based on our proprietary BCD technologies manufactured in our [indiscernible] 300-millimeter wafer fab. We have progressed well with the integration of NXP MEMS sensors business acquired in February. As we anticipated, the complementary technology and product portfolio is strengthening our Automotive Sensors business with awards at key players for active safety application and tire pressure monitoring. Industrial improved 20% sequentially and 34% year-over-year. Importantly, inventory in distribution further decreased and is now below our standard target. This solid growth was driven by our general purpose microcontrollers and by analog with their wide ecosystems and by our application-specific analog products, complemented by power conversion products. We are strongly positioned to support the ongoing transformation of factory automation, robotics and power and energy infrastructure. Our portfolio is uniquely addressing the emerging needs of physical AI where intelligent sensing, real-time control and efficient power management are increasingly critical. During the quarter, we saw design wins across industrial automation, power systems, building automation and home appliances. We continue to introduce new advanced sensor for this application. We launched a new series of industrial MEMS sensors with embedded AI tailored for the fast-growing industrial condition monitoring market. We also announced a new compact 3D LiDAR module, delivering AI-ready output data for low compute Edge AI systems running on microcontrollers and high-performance sensing in applications such as robotics, industrial automation, smart buildings, ER/VR and health care. This is in line with our strategy to move beyond stand-alone sensors and deliver integrated sensing systems that support real-world Edge AI. Finally, we announced a further expansion of our collaboration with NVIDIA to accelerate physical AI. As a partner in NVIDIA Halos for robotics and end-to-end functional safety system for industrial and humanoid robots, ST is bringing its microcontrollers, sensors, motor control and security solutions to support Halos readiness across chips, evaluation kits, software and reference designs. For Personal Electronics, second quarter revenues were up 3% sequentially and 20% year-over-year. This growth was driven by increased content by device in our engaged customer programs and better than normal seasonality. During the quarter, we introduced secure chips that help smartphone and personal electronics manufacturers prepare for quantum-ready security requirements. It combines post-quantum cryptography acceleration with NFC, secure element and eSIM functions on a single-die for use cases such as digital identity, payments and digital car keys. We also introduced a new generation of ultra-low power global shutter image sensors that deliver high-quality, always-on vision to compact devices operating on batteries or harvested energy such as wearables, AR/VR and IXA/IXS, smart home appliances and medical devices. They are engineered to deliver rich visual context and AI-ready data under tight constraints on power, size and cost. With the depth sensing technologies I mentioned earlier and this device for AI vision, ST delivers a complete perception stack for Edge AI to customers. For Communication Equipment & Computer Peripherals, second quarter revenue were above expectations, showing increase of 13% sequentially and 50% year-over-year. This growth was driven by our engaged customer programs with our custom design products, boosted by our microcontrollers for optical connectivity. Indeed, ST is a core enabler for the Cloud AI era. We see strong traction on optical connectivity driven by silicon photonics ICs, electronic ICs, microcontrollers. For the power stage of Cloud AI, we are already successful with our microcontrollers and high-voltage power and analog products, and we are building a pipeline of design wins for low-voltage power and analog products. Therefore, we are raising our revenue ambition for data centers. We now expect revenue above $1 billion in 2026 and assuming the current dynamics continues and with the current engagements we have well above $2 billion in 2027. During the quarter, we secured multiple design wins across a range of products from optical connectivity driven by silicon photonics ICs, electronic ICs and microcontrollers to silicon and silicon carbide-based power solutions. In addition, we see a growing number of nontraditional AI server companies, including players coming from industries such as solar power and battery storage, where we are leveraging strong relationships to support their expansion into this field. In May, we held a webcast on the Low Earth Orbit satellite communication and new space opportunity for ST, highlighting how ST is positioned as a core semiconductor enabler across this new industry. We see a significant opportunity here with our addressable market expected to reach around $3 billion by 2030 or about 4x the 2025 level. ST expects to generate well above $3 billion in cumulative space revenue over the period 2026, 2028, mainly with our BiCMOS, FD-SOI and Panel Level Packaging technology. Finally, in June, ST joined the EUR 115 million Series A financing of Quobly to accelerate the industrialization of its silicon-based quantum computers and bring its first commercial product to market by the end of 2026. For ST, the scale needed by high-performance computing customers can only be achieved if breakthrough quantum systems can be industrialized and integrated with semiconductor grade standards and backed by a robust ecosystem. We are leveraging years of shared expertise in FD-SOI and deep technological collaboration to accelerate the commercialization of Quobly's products through our 300-millimeter silicon fab environment. In May, we held our 2026 ST Microelectronics Annual Shareholder Meeting, where all resolutions were approved. Following the AGM, ST Supervisory Board appointed Mr. Armando Varricchio as the Chairman and Mr. Nicolas Dufourcq as the V Chairman of the Supervisory Board. Now over to Lorenzo, who will present our key financial figures. Lorenzo Grandi: Thank you, Jean-Marc. Good morning, everyone. Let's start with a detailed review of the second quarter, starting with revenues on a year-over-year basis. By reportable segment, Analog Products, MEMS and Sensors grew 26%, mainly due to Imaging and MEMS and to a lesser extent, Analog. Power and Discrete products increased by 3.7%. Embedded Processing revenues were up 35.5%, mainly due to general purpose microcontroller and to a lesser extent, custom processing and connected security. RF & Optical grew 32%. By end market, Communications Equipment & Computer Peripherals grew 50%, Industrial 34%, Personal Electronics 20%, and Automotive 16%. Year-over-year sales to OEMs and distribution increased 23.3% and 33.1%, respectively. On a sequential basis, by reportable segment, Analog Products, MEMS and Sensors increased by 8.2%, Power & Discrete by 19.2%, Embedded Processing by 17.7% and RF & Optical Communications by 8.6%. By end market, on a sequential basis, Industrial grew 20%, Automotive 14%, Communication Equipment & Computer Peripherals 13% and Personal Electronics 3%. Turning now to profitability. Gross profit in the second quarter was $1.22 billion, increasing 31.1% on a year-over-year basis. Gross margin was 34.8%, increasing 130 basis points year-over-year, mainly due to lower unused capacity charges and better product mix. On a sequential basis, gross margin increased by 100 basis points. Non-U.S. GAAP gross margin was 35.2%. Q2 gross margin included about 60 basis points of negative impact resulting from nonrecurring cost related to our manufacturing reshaping program. The negative impact on gross margin just mentioned, nonrecurring cost is expected to remain at a similar level over the rest of the year. Total net operating expenses, excluding restructuring amounted to $970 million in the second quarter. Non-U.S. GAAP OpEx stood at $960 million, in line with the expectation given in April. For the third quarter of 2026, we expect non-U.S. GAAP net OpEx to stand at about $980 million. The sequential increase is mainly due to start-up costs and employee share award expenses that are more than offsetting the positive vacation seasonality effect. Excluding these 2 headwinds, Q3 '26 non-U.S. GAAP net OpEx would have been at about $920 million. For full year 2026, we now expect non-U.S. GAAP net OpEx to be slightly above $3.8 billion taking into account increased employee share award expenses and the temporary impact of the start-up cost, reducing our other income and expenses positive line. For full year 2026, non-U.S. GAAP net OpEx are expected to increase low double digit year-over-year. Excluding NXP MEMS business acquisition and the exchange rate impact, like-for-like net OpEx should be up high single digit year-over-year. Our cost saving plan is delivering its expected benefits. At the same time, we are accelerating our investment in new business opportunities. In the second quarter, we reported $187 million operating income, which included $58 million for impairment, restructuring charges and other related phase-out costs. These charges are related to the execution of the previously announced company-wide program to reshape our manufacturing footprint and resize our global cost base. Q2 operating income also includes $24 million purchase price allocation effect from our acquisition of NXP MEMS sensor business. Excluding these items, Q2 non-U.S. GAAP operating income stood at $269 million and non-U.S. GAAP operating margin was 7.7% with Analog Products, MEMS sensor at 10.1% Power & Discrete at minus 21.4%, Embedded Processing at 19.7% and RF & Optical Communication at 21.2%. Second quarter 2026 net income was $222 million compared to a net loss of $97 million in the year ago quarter. Diluted earnings per share were a positive $0.24 compared to a negative of $0.11 one year ago. Non-U.S. GAAP net income stood at $291 million and non-U.S. GAAP diluted earnings per share stood at $0.31. Net cash from operating activities totaled $502 million in the second quarter, including $44 million outflow related to restructuring compared to a net cash flow from operating activities of $354 million in the year ago quarter. Net CapEx was $409 million in the second quarter compared to $465 million in the year ago quarter. We now expect 2026 net CapEx to be at the high end of our $2 billion to $2.2 billion range, reflecting accelerating investments in the selected growth drivers, including cloud optical interconnect. Free cash flow was positive at $75 million in the second quarter compared to a negative $152 million in Q2 2025. Inventory at the end of the quarter was $3.19 billion compared to $3.17 billion in Q1 '26 and $3.27 billion in Q2 2025. Days sales of inventory at the quarter end were 126 days, in line with our expectation compared to 140 days for the previous quarter and 166 days in the year ago quarter. Cash dividends paid to stockholders in the second quarter of 2026 totaled $75 million. ST maintained its financial strength with a net financial position that remains solid at $2.01 billion as of June 27, 2026, reflecting total liquidity of $6.03 billion and total financial debt of $4.02 billion. During the quarter, ST issued a new $1.5 billion dual tranche senior unsecured convertible bond, Tranche A and Tranche B for $750 million each due to 2031 and 2033 and announced the early redemption of its $750 million convertible bond due in 2027. Now back to Jean-Marc, who will comment on our outlook. Jean-Marc Chery: Thank you, Lorenzo. Now let's move to our business outlook for Q3 2026. So we are expecting Q3 revenues of $3.7 billion plus/minus 350 basis points at the midpoint of our Q3 '26 net revenues will increase 6.2% sequentially and by 16.2% year-over-year. We expect our gross margin to be about 37% plus/minus 200 basis points, including about 70 basis points of unused capacity charges. This business outlook does not include any impact for potential further change to global trade tariffs compared to the current situation. To conclude, in Q2, we saw demand further accelerating, strong bookings in all end markets and improved visibility. In Q3, revenues are expected to continue to grow sequentially and year-over-year and gross margin to continue to improve. As previously anticipated, Personal Electronics seasonality this year is different compared to previous years. Revenue growth for Personal Electronics is expected to be below normal seasonality in Q3, moderating ST sequential growth in the third quarter. In Q4, we anticipate a revenue growth acceleration, mainly driven by our engaged customer programs in AI data centers and Low Earth Orbit satellite communication. We expect Q4 revenues to be above $4 billion, representing a sequential improvement better than normal seasonality. This translates into H2 versus H1 growth above our normal 15% seasonality. ST growth driver remains solid. We continue to see strong demand in AI data centers, reflecting the success of our product and technology portfolio. We are raising our revenue ambition for data centers. We now expect revenues above $1 billion in 2026 and assuming the current dynamic continues and with the current engagement we have well above $2 billion in 2027. This confirms ST's strong position in the evolving AI data center. Thank you, and we are now ready to answer your questions. Janardan Menon: I was just looking into your second half guidance and trying to get a feel for your gross margin trend into Q4. So I know you don't want to guide on Q4, but you are talking about a bigger increase in revenue quarter-on-quarter. And we don't know how much it is, I agree, because you just said more than $4 billion. But I was wondering directionally, whether you can give us any qualitative comments on how your Q4 gross margin could proceed and how you see that evolving into 2027 as well? Lorenzo Grandi: Okay. Thank you for the question. I take the question, and Jean-Marc, about the gross margin, the evolution. Clearly, let's say, the midpoint of Q3 non-GAAP gross margin or gross margin for us in Q3 will be 37%. We have guided at this level of gross margin that is increasing, let's say, about 180 basis points compared to the one of Q2. Clearly, starting from this Q3 gross margin at 37%, we do expect, let's say, for Q4, a sequential improvement in our gross margin, considering that our revenue will increase significantly. But you have to keep in mind that there is some headwinds as well. One is that, let's say, our level of unloading charges will not change significantly in Q4 due to the fact that we are starting some fab, particularly in China, let's say, which we will still have some negative impact on our, let's say, level of unloading. And clearly, there is also still, let's say, this cost related to the transfer of technology related to our reshaping program in our manufacturing infrastructure that will be still there, similar to the one that we have in the current quarter in Q3. So yes, I confirm there will be improvement, but there will be also some, let's say, headwinds that are, let's say, impacting our gross margin. Overall, anyway, I confirm that in Q4, there will be an improvement in our gross margin, sequential improvement compared to the 37% of the Q3. Janardan Menon: But given that your revenue jump is going to be bigger, can we assume that your gross margin jump will also be bigger? Or is that a speculation? Lorenzo Grandi: As I said, they will improve, let's say, compared to the 37%, but still, let's say, it will be impacted by some ingredients that is related to this level of unloading that will not decrease, let's say, while when you look, let's say, the dynamic between Q2 and Q3, unloading was, let's say, decreasing. This will not be similar what will happen in -- between Q3 and Q4, let's say. And as well as, don't forget that when we look at the dynamic of our gross margin moving from Q3, we had also benefit from the FX, let's say, that was improving in respect while, let's say, in Q4, this effect will not be there. It will be neutral. So yes, I repeat that there will be an increase in our gross margin, but you have to also consider in your modeling that there are some headwinds, temporary headwinds, but there will be in Q4, let's say, that will be limiting somehow the improvement of our gross margin in Q4. Joshua Buchalter: I guess I want to start with the data center number. Can you provide some more granularity on what's driving the big increase in 2027 versus the prior expectations? Like how much of this is optics versus power? It did sound like there was some positivity on the power side. And then I guess also is you mentioned you were capacity constrained before. Is that number greater than $2 billion, assuming you're still constrained as well? Jean-Marc Chery: So before I pass the question to Remi to go in further detail, it is clear that our growth in 2027 will be driven both by our specific engaged customer program on this field of activity. But clearly, the overall success on optical cable connectivity. Clearly, it will be the main driver of the significant growth we will do next year. Now I'll let Remi comment more in detail. Remi El-Ouazzane: To complement what Jean-Marc said, we see clearly an acceleration in the adoption of 800 gig and 1.6 terabit per second pluggable optics. And those are actually generation and categories of transceivers where now we are seeing a triple effect and this triple effect is a fairly large market share when it comes to the microcontroller, taking care of the control plane, a growing share when it comes to the electronic IC driven by our BiCMOS technology. And starting from next year, but really accelerating next year is actually our growing revenue in silicon photonics supporting photonics IC that is being part of those pluggable transceiver. Like we will explain, we have a lot of scalability in terms of capacity on that technology because of the structure we have in our Crolles factory. So we are not right now gated by capacity expansion to go and capture revenue at this stage. Joshua Buchalter: Maybe a follow-up on that also. I totally appreciate what Lorenzo, you were highlighting from the manufacturing transitions and underloading charges. But on a like-for-like basis, should data center as it grows, be accretive to gross margins? Lorenzo Grandi: Yes. At the end, yes, this kind of, let's say, clearly, this has been already, let's say, moving from Q2 to Q3 and will be also contributing from Q3 to Q4, product mix is contributing in a positive way to our gross margin. Yes, I confirm. Jakob Bluestone: So I had a question and a follow-up. On the pricing, could you maybe just give us a bit of an update what are you seeing in terms of pricing tailwinds? And when do you think that might impact revenues this year? Lorenzo Grandi: Yes. In terms of pricing, I would say that, of course, it's twofold. On one side, it's true that we see, let's say, in our input cost price increase. Clearly, there are different materials or maybe, contractor activity that are increasing prices. On the other side, I would say that there is the other side that is -- that we confirm that in this context, let's say, of higher input cost, yes, we're increasing the prices on selected products. Clearly, this is an ongoing process that is, expanding in terms of, let's say, price increase. And I would say that at the end, what we see in our input cost is more than offset what we do on our top line. So I would say that at the end, at this stage, the 2 impacts are more or less offsetting each other. Jakob Bluestone: And if I just ask a quick clarification. On your data center revenue guidance hike, was that increase driven by increased demand outlook or by a faster expansion of your capacity and supply? Jean-Marc Chery: It's both. Because clearly, above $1 billion 2026 revenue, the demand is well, well above, but thanks to our capability to grow in the various assembly and test manufacturing. So that's the reason why we have increased our indication for this data center business. And next year is the same. Next year, clearly, we will closing the gap between the demand and our capability to supply but it is really driven first by demand, then it is covered by engagement. Backlog for this year, 100% coverage. And next year, okay, engagement are covering our expectation. And definitively, our capability to grow on this advanced 300-millimeter technology is a very important competitive factor for us. Sandeep Deshpande: Could you talk about the revenue growth guidance into Q3 and then potentially into Q4 by your segments? Because you said on the -- earlier in the call that Personal Electronics was weaker in the third quarter. But can we look at how the growth was in the other segments? And based on what you are indicating for the fourth quarter at the moment of greater than $4 billion, at least directionally, how to see the different segments in terms of your end markets into the fourth quarter based on your order book today? Jean-Marc Chery: I will take the question. Well, clearly if I am starting by the key growth driver, it's clearly our verticals, Communication Equipment & Computer Peripheral. I can say that in Q3 on a year-over-year growth, this segment will grow very similarly what we have achieved in Q2. So means close to 60% growth. And definitively, where will have in Q4 a very strong acceleration, means, okay, we will be about 90% growth. The second really positive growth vertical is Industrial. Industrial in Q2, we grew 32%. And step after step, Q3 and Q4, we will go close to 40% growth year-over-year in Q4. Well then, clearly, Automotive is performing above what we expect and what the market is expecting. You know that for semiconductor industry, the Automotive is expecting to grow about 13%, 14% year-over-year. This is what we will achieve on this segment. Well, PE is definitively a different profile, let's say, in the year-over-year growth because it will be slightly negative, let's say, mid-single digit during Q3 and Q4 as we anticipated in our previous call, that will put this segment at the end of the year for the full year growing, let's say, from low to mid-single digit that we already anticipated in the previous call. So my takeaway is really very strong growth on Computer and Communication moving from 60% growth in Q2 to close 90% in Q4. On Industrial after Q2 of 30% growth year-over-year, we will grow close to 40% in Q4. Automotive, let's say, low double digit as expected consistently with the market. And this year, okay, different profile for PE will be year-over-year negative on H2 after having been positive in H1. But on the full year, it is low to mid-single digit, which is consistent with the market of a smartphone that is decreasing because on the low end, let's say, device, there is an impact because of the memory price. So this is the profile of the revenue, Q3, Q4. Sandeep Deshpande: Question would be that you've seen this significant strength in Computer and Peripherals associated with the AI market. Is there not any flexibility in filling your capacity in the third quarter itself? Why does this have to wait until the fourth quarter given that you still remain underutilized in the third quarter? Jean-Marc Chery: Let's say, all the advanced technology that are enabling our growing Industrial market and Communication and Computer, we are in a permanent growth and exactly at what we expect. And here, the only flexibility we could have is to continue to accelerate permanently, which is already on really a competitive path. Then clearly, where we have still some, let's say, underloading and even sometimes, okay, in Q2, we face a slight delay in our capability to ramp up, it is on legacy -- pure legacy analog technologies because if you remember, Q1, we were totally underloaded. So the Q2 ramp-up was challenging. So we delay a little bit this ramp-up that in a certain extent, has impacted also our capability on Q3 to fully fulfill the demand on legacy technology. So this is, let's say, pure temporary capability to ramp and some unloading charges specific to really legacy technology on analog that is, let's say, showing this figure. Domenico Ghilotti: I have a follow-up on the gross margin. So in the past, you were guiding -- you were suggesting that at $4 billion sales per quarter, so the profitability gross margin would have been at least in the 40% range. Now you are suggesting that you will probably not be at that point in Q4. So I'm trying to understand how this -- so first of all, if you are still confident to get to the level of profitability you were suggesting and there are some specifics -- temporary effect on Q4 that we should take into account? And a follow-up on the AI data center demand and your customer engage program. Can you give a sense of how concentrated is today the demand there and the engage program supporting your $2 billion revenues for 2027? Lorenzo Grandi: Maybe I take the first question about the gross margin at $4 billion in respect to our model to be above, let's say, the 40% gross margin. Here, I have to remind all of you that, yes, this is our model, but let's say, we always said that there are 2 conditions that we need to achieve in order, let's say, to be above 40% when the company will be at $4 billion. One is the revenue, of course, let's say, that this is what is happening. But the other point is that we complete our reshaping manufacturing program. Means that actually we have, let's say, done this transfer from the 200-millimeter to the 300-millimeter for the silicon closing 2 fabs and let's say, from the 150-millimeter to the 200-millimeter for the silicon carbide. We are not yet there. We are, let's say, in the middle of this transformation. So clearly, here, we are not in the condition to have our manufacturing infrastructure at the right level of efficiency. The other way around, I would say that in this moment, in the quarters, Q3 and Q4, we have some kind of extra cost that are related to this transfer, the qualification of the products, the redo of the mask of the products, all these kind of things that are impacting our gross margin and that clearly for optimal efficiency due to this transition. So at the end, we confirm our model to be, let's say, above 40% when the company is there. But once we have done the transformation when we have completed our programs that, as you know, it will be at the end of 2027, not before. So this is the reason why it is not enough to be at $4 billion to have gross margin at the right level of the model. Jean-Marc Chery: On the second question, maybe, Remi, you can comment, again, the key growth driver that will put us on a trajectory well above $2 billion next year. Remi El-Ouazzane: Yes. We have discussed earlier about what we're doing on the optical front. And I insist on the fact that we are now at the intersection of 3 main vectors of growth, which is the oversized market share we have, 800 gig and 1.6 terabit per second in MCU, the growing adoption of our [indiscernible] BiCMOS process for electronic IC and the steep ramp-up we have on our photonics IC platform, our silicon photonics platform in 300 millimeters, which has proven to be really, really well adopted across the board by all the major actors. And I think there was also a question related to the concentration of that revenue. And we see an evolution of our revenue that is pretty consistent with market share distribution between hyperscalers, which makes us actually quite confident about the composition of our revenue. Didier Scemama: My first question is on the outlook. I think, Jean-Marc, in your prepared comments, you mentioned that your book-to-bill was close to 2, I think, overall and above 2 in certain segments like Optical Interconnect in particular. So I'm just wondering, does that imply that your first quarter seasonality might be a bit better than normal? And I've got a follow-up. Jean-Marc Chery: Thank you. Yes, with this book-to-bill, what also is interesting is that out of the 100% of the booking we received in Q2, well above 50% were for next year. So it means the customer now they have understood that they have to provide us visibility more. And the good news is that now our total backlog is representing about an average of 4.5 to 5 quarters of Q2 average revenue, which is clearly an improvement step. Coming back to standard of visibility. So clearly, yes, Q1 is today on the dynamic to be well loaded and clearly continuously boosted by our revenue related to AI data center. Didier Scemama: Okay. Great. And as a follow-up, I just wanted to make sure I got the right end of the stick on the financial model. So I think in the past, you were talking about 45% gross margin on $18 billion and then maybe 50% gross margin on $20 billion. Obviously, that's contingent on execution of the restructuring plan on manufacturing. So just wanted to make sure that this is still the case and whether you've got increased confidence that you can deliver these sort of numbers around 2028? Jean-Marc Chery: We confirm our confidence level to reach $18 billion in 2028. And clearly, announcing the dynamic and increasing our indication on data center, it is clearly one of key growth driver that will position our company on $18 billion by 2028. Then second, Lorenzo already commented that this business related to AI data center is accretive to our gross margin. So we will have this mixed effect model. Okay, I confirm that assuming we complete on time our reshaping program on manufacturing and that the FX will remain our model, we should be in position to reach the gross margin target consistently with our $18 billion model. More about $20 billion, okay, for the time being, let's reach together the $18 billion target, then we speak about the $20 billion. Stephane Houri: So I would love to come back on maybe the satellite Low Earth Orbit opportunity. And if you can tell us what is the dynamic currently, notably with your main customer and the ramp of your second customer? And if you confirm the target of $1 billion for this year and if you have a view for next year already? Jean-Marc Chery: Thank you. I'll pass the question directly to Remi. Remi El-Ouazzane: Stephane, the dynamic is quite healthy. Overall, like Jean-Marc explained at the beginning of the discussion, we stick to well above $3 billion over '26, '27, '28. You have noticed that and we spoke about that in the past that it's very much a launcher dependent business in the context of deploying satellite and then deliver the services which in itself is a fuel behind user terminal consumption. Clearly, things are progressing in the right direction [indiscernible]. Other constellation have faced a bit of a snag lately, and to be fixed in the coming quarters. But directionally, nothing has changed. We see actually a strong '26 and an even stronger '27. Stephane Houri: Okay. And can you comment on the level of profitability on the gross margin on this business like you did for data center? Is it accretive? Lorenzo Grandi: Yes, clearly, let's say, is a business with a combination of different gross margin because clearly, there are different products, the one that are going in the satellite, the one that are going in the gateway, the one that are going, let's say, in the user terminal. Anyway, when we look, let's say, at the average of the gross margin of this business, yes, I confirm that also Low Earth Orbit satellite is contributing, let's say, to the improvement of our gross margin. Francois-Xavier Bouvignies: My first question was on the capacity front. I mean we see an acceleration of growth from a cycle perspective, but also from AI data centers. And you are seeing some tightness, as you say in the release, also TI suggested as well some tightness. So I was wondering, how do you feel about your capacity in the next, let's say, 2 to 3 years? I mean, do you have, you think enough capacity to deliver the different growth scenarios? Or are you evaluating maybe some brownfield or greenfield expansion down the line so the capacity of ST in the next 2, 3 years would be helpful? Jean-Marc Chery: We have to see it under 2 angles. One angle is what is related now our capability to support AI data center and at this stage, we believe that we can sustain it and support it. Of course, under the assumption, we are well assessed the dynamic we have today, on optical cable and microcontroller. And clearly, the key success factor is Crolles. And Crolles will reach 15,000 wafer per week and will go above to support the dynamic of this business. Clearly, we see some tightness is clearly what is related general purpose microcontroller. Why? Because first of all, we have 2 cumulated effect. There is first the enormous success of the microcontroller developed by Remi team for optical cable. And there is the solid recovery of the overall industrial market. And where, okay, I mentioned during my address that in distribution inventory now well below our standard and the POS dynamic is very strong. It is here that we are facing at this moment some tension on the supply and increasing lead time. But here, basically, we have some key competitive advantage. First of all, we have our 300-millimeter fab, where clearly our microcontroller will be processed. The good news now is I got 300-millimeter, certainly will reach the full build-out pretty soon before 2028, and will be capable to support the growth of microcontroller as soon as we will have qualified as the 19-nanometer and 14-nanometer technology. Then the second important lever is our China for China strategy that will start to pay back because if you remember, we have qualified 14-nanometer technology in China with our main partner that will enable us to support the growth in China. That is very demanding, both for Industrial in distribution, but industrial OEM and also optical cable. On the other, let's say, technologies and product, clearly, the challenge for us is our transition phase between respectively, 6-inch to 8-inch silicon carbide technology and 8-inch to 12-inch analog technology. And we are accelerating as fast as we can in synchronization with our customer that could create time to time, okay, some temporary tightness on the supply. So this is ok, the overall picture. So 3 elements, more short term on microcontroller, but we have exactly in our hand, our capability to grow. All the new technology driven by AI data center, we have the path to grow. Some other tightness related to our reshaping but only temporary. Then after, we have some pocket of capacity limitation time to time with OSAT, but okay, we manage it. Francois-Xavier Bouvignies: And maybe my follow-up would be on silicon carbide actually. I mean, we see a lot of change in terms of silicon carbide demand, one driven by the Chinese EV carmakers adopting 800 volts supporting the silicon carbide growth, but also we see one of your main customers delivering strong deliveries. And on top of that, you have the 800 volts opportunities for silicon carbide. So I was wondering if you saw an improvement on the silicon carbide front? And if you could provide any maybe guidance on what to expect for that business, that would be great? Jean-Marc Chery: Thank you. So I will pass the question to Marco, who is managing the product line. Yes, okay, all the positive dynamic you described, we see it, but Marco will connect. Marco Cassis: Yes. I confirm that we see the positive dynamics that you just highlighted. Actually, in Q2, we saw the revenue growth in the low teens year-over-year. So we are back to growth year-over-year and mid-30s in terms of quarter-over-quarter. This is also supported by strong bookings, a book-to-bill that is well above 1, which is resulting in a growing backlog. So the dynamics are confirmed and are factual is what we see. So in this context, I can confirm that this year, we should grow the silicon carbide revenues double digit in '26 versus '25 based on already design wins and backlog, which is already visible. So the dynamics are positive. Of course, we are facing the transition between the 6 inches and 8 inches, which have sometimes created some tightness in terms of supply because the products need to be qualified by end customers. But I confirm that the dynamics are positive and are growing positive day by day. Jerome Ramel: Thank you, Francois. This is ending our call for this quarter. So thank you very much, everyone, for joining us. And we remain at your disposal should you need any follow-up questions. Thank you. Lorenzo Grandi: Thank you. Jean-Marc Chery: Thank you. Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye. Before you buy stock in STMicroelectronics, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and STMicroelectronics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $369,577!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,301,557!* Now, it’s worth noting Stock Advisor’s total average return is 908% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of July 23, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. STMicroelectronics (STM) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Technology earnings are reinforcing investor concerns that the powerful first-half rally may have pushed parts of the sector too far, with the market becoming increasingly reluctant to reward rising profit forecasts. The MSCI World Semiconductor Index has fallen 6% in July as investors took profits from chipmakers, while software stocks have gained a more modest 1%. EPFR Global analysts, including Winston Chua, said traders were moving away from technology stocks, pointing to the long-short ratio on Nasdaq 100 futures, which dropped 63% over the past year and reached a 17-year low on July 14. These moves suggest positioning and elevated expectations may now matter as much as underlying earnings growth when investors assess technology stocks. Warning! GuruFocus has detected 5 Warning Signs with TXN. Is TXN fairly valued? Test your thesis with our free DCF calculator. STMicroelectronics (NYSE:STM), a chipmaker, fell 18% on Thursday after its outlook came in below sell-side forecasts, while Texas Instruments (NASDAQ:TXN), a U.S. chipmaker, declined 3% despite providing an upbeat outlook. Simone Ragazzi, a senior equity analyst at Algebris Investments, said investors had rotated aggressively away from AI-related stocks amid concerns about infrastructure overcapacity, uncertain returns on large investments, stretched valuations and possible demand moderation. He also pointed to the delayed OpenAI IPO and stronger competition from Chinese AI models as additional concerns, although he said underlying fundamentals remained strong as analysts continued raising capital-expenditure forecasts for hyperscalers. Ken Hui, a director at Bakewell Alpha Fund, said his team reduced or exited holdings in Taiwan Semiconductor Manufacturing, a chipmaker, BE Semiconductor Industries, a semiconductor company, and STMicro before their earnings reports despite maintaining positive long-term views, with the possibility of buying again if valuations become more attractive. Software stocks, however, have received a more supportive response after profit warnings from IBM, a technology company, and Accenture, a professional-services company, increased concerns that advanced AI tools could disrupt the sector. Dassault Systemes (DASTY), a software company, rose on Thursday after delivering results in line with expectations, while SAP (NYSE:SAP), a software company focused on cloud services in the source article, advanced in U.S. trading after cloud revenue matched forecasts. JPMorgan Chase, a financial-services company, said hedge funds had become unusually underweight hyperscalers and Magnificent Seven stocks even as many companies in the group continued producing strong earnings and increasing capital expenditure. JPMorgan derivatives strategists, including Adam Halmi, recommended buying a call spread on the Magnificent Seven basket, arguing that heavily reduced positioning could support the group if its members broadly avoid disappointing investors during earnings season.

STMicroelectronics N.V. STM emphasized accelerating demand across artificial intelligence infrastructure, industrial applications and automotive markets during its second-quarter 2026 earnings call, with management raising its data center revenue outlook as customer engagements expanded. The company reported results above expectations, while executives focused more heavily on future growth drivers, manufacturing transitions and improving demand visibility. STM’s president and CEO Jean-Marc Chery highlighted AI data centers as a major growth catalyst, and the company now expects data center revenues above $1 billion in 2026 and well above $2 billion in 2027 under current demand dynamics. Management pointed to strength in optical connectivity, including silicon photonics, electronic ICs and microcontrollers used in AI infrastructure. Chery said that customer engagement programs and backlog coverage were supporting the revised outlook. The company also noted that data center products are contributing positively to the product mix. CFO Lorenzo Grandi said that this business is improving gross margin trends as higher-value products gain a larger role. STMicroelectronics' second-quarter revenues of $3.49 billion beat the Zacks Consensus Estimate of $3.45 billion and increased 26% year over year. The company reported adjusted earnings of $0.31 per share compared with the Zacks Consensus Estimate of $0.26. STMicroelectronics N.V. price-consensus-eps-surprise-chart | STMicroelectronics N.V. Quote Management said demand increased across end markets, with bookings strong and book-to-bill close to 2 overall. Distribution inventory declined below the company’s standard target. Automotive revenues increased 16% year over year, while industrial revenues grew 34% and communications equipment and computer peripherals revenues increased 50%. STM discussed ongoing manufacturing reshaping efforts, which continue to affect profitability during the transition period. The company reported non-U.S. GAAP gross margin of 35.2% in the second quarter. Grandi explained that temporary costs related to technology transfers, product qualification and manufacturing changes are limiting near-term margin expansion. Management expects these effects to continue while the restructuring program progresses. The company maintained its long-term model of achieving stronger margins once manufacturing efficiency improvements are completed. Management linked future profitability improvement to completion of the reshaping program. STMicroelectronics expects third-quarter revenues of $3.70 billion at the midpoint, representing 6.2% sequential growth and 16.2% year-over-year growth. Gross margin is expected to be 37%, including unused capacity charges. Management expects fourth-quarter revenues to exceed $4 billion, driven mainly by AI data center programs and low Earth orbit satellite communication opportunities. Executives also highlighted improving customer visibility, noting that more than half of second-quarter bookings were for next year. The company said that its backlog represents about 4.5 to 5 quarters of average second-quarter revenues. A TD Cowen analyst asked about the drivers behind the higher 2027 data center outlook. Management attributed growth to optical connectivity adoption, including 800-gigabit and 1.6-terabit-per-second pluggable optics, along with silicon photonics expansion. A JPMorgan analyst questioned whether capacity constraints could limit AI-related growth. Chery responded that advanced technologies supporting industrial and communications growth were progressing as expected, while some legacy analog capacity challenges remained temporary. Analysts also examined future gross margins. Management reiterated that reaching targeted margin levels depends on completing manufacturing transformations rather than revenue scale alone. STMicroelectronics ended the earnings call emphasizing growth opportunities in AI infrastructure, industrial automation, automotive electronics and satellite communications. Management highlighted partnerships and product development efforts aimed at expanding its role in emerging technology markets. The company also maintained a strong balance sheet position, reporting $2.01 billion in net financial position and positive free cash flow of $75 million in the second quarter. Executives balanced optimism around demand with continued focus on manufacturing execution, cost management and capacity alignment as key priorities ahead. Currently, STM sports a Zacks Rank #1 (Strong Buy), indicating that earnings estimate revisions are a key factor supporting the stock’s current Zacks Rank. The Zacks Rank focuses on the direction and magnitude of estimate revisions and can change after new earnings information is incorporated. You can see the complete list of today’s Zacks #1 Rank stocks here. The stock has a Value Score of D, a Growth Score of D, a Momentum Score of B and a VGM Score of F. Zacks Style Scores use grades from A to F, with higher scores representing stronger characteristics for the specific style category. The combination of Zacks Rank and Style Scores provides investors with separate measures of earnings revision trends and stock characteristics. Future estimate revisions following the latest results may affect the company’s Zacks Rank. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report STMicroelectronics N.V. (STM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

STMicroelectronics N.V. STM reported exceptional second-quarter 2026 results, with adjusted earnings per share (EPS) and net revenues beating the Zacks Consensus Estimate and increasing year over year.The quarterly results reflect higher Communications Equipment and Computer Peripherals (CECP) and Automotive sales, reflecting stronger demand across a broad set of applications. Also, AI data center and communications programs gained momentum during the quarter, further boosting the top line.STM stock plunged 13.8% during today’s pre-market trading session, following the financial results. STM’s second-quarter 2026 adjusted earnings of 31 cents per share were significantly up 416.7% year over year. The figure beat the Zacks Consensus Estimate of 26 cents by 19.2%.Net revenues rose 26% to $3.49 billion year over year and surpassed the consensus mark of $3.45 billion by 1%. STMicroelectronics N.V. price-consensus-eps-surprise-chart | STMicroelectronics N.V. Quote Analog products, MEMS and Sensors revenues increased 26% to $1.43 billion. The segment generated operating income of $144 million and an operating margin of 10.1%, with growth led mainly by Imaging and MEMS.Power and Discrete products revenues rose 3.7% to $464 million, but the segment posted an operating loss of $99 million and a negative 21.4% margin. Embedded Processing revenues jumped 35.5% to $1.15 billion, while operating income increased 97.8% to $226 million.RF Optical Communications revenues climbed 32% to $445 million. Operating income increased 56.3% to $94 million, producing a segment operating margin of 21.2% compared with 17.9% a year earlier.Automotive revenues increased 16% year over year and 14% sequentially. Industrial sales climbed 34% from the prior-year quarter and 20% from the first quarter, reflecting stronger demand across a broad set of applications.Personal Electronics revenues advanced 20% year over year and 3% sequentially. CECP was the strongest end market, rising 50% from a year ago and 13% quarter over quarter as AI data-center and communications programs gained momentum. Original equipment manufacturers generated 70% of revenues, while distribution accounted for 30%. Adjusted gross margin expanded 170 basis points (bps) year over year and 110 bps sequentially to 35.2%. Reported gross margin was 34.8% (up 130 bps year over year), aided by lower unused-capacity charges and a better product mix.Adjusted operating margin reached 7.7%, up from 2.1% in the year-ago quarter. Adjusted operating income rose a whopping 371.9% to $269 million, while adjusted net income surged 410.5% to $291 million. Adjusted net operating expenses were $960 million, representing 27.5% of revenues. Net cash from operating activities totaled $502 million compared with $354 million a year earlier. Net capital expenditures were $409 million, down from $465 million in the prior-year period.Free cash flow was positive $75 million against a negative $152 million a year ago. Inventory was $3.19 billion, while days sales of inventory improved to 126 days from 166 days. STM ended the quarter with liquidity of $6.03 billion and a net financial position of $2.01 billion. For the third quarter of 2026, STMicroelectronics expects revenues of $3.70 billion at the midpoint. This implies growth of 6.2% sequentially and 16.2% year over year, with a range of +/- 350 bps.Gross margin is projected at 37%, +/- 200 bps. The outlook assumes an effective euro-dollar exchange rate of about $1.14 and excludes potential effects from further changes to global trade tariffs. Management expects fourth-quarter 2026 revenues above $4 billion, driven mainly by engaged customer programs in AI data centers and low-Earth-orbit satellite communications. That outlook points to second-half growth above the company’s normal 15% seasonality.STM now expects data-center revenues above $1 billion in 2026 and, assuming current demand and customer engagements continue, well above $2 billion in 2027. The company also cited strong bookings across all end markets, improved visibility and signs of tight supply in several product categories. Currently, STMicroelectronics sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Here are some companies from the Zacks Computer and Technology sector, which according to our model, have the right combination of elements to post an earnings beat.Dell Technologies Inc. DELL has an Earnings ESP of +3.89% and a Zacks Rank of 1 at present. Dell’s earnings beat estimates in each of the last four quarters, the average surprise being 18.7%. The company’s earnings for the second quarter of fiscal 2027 are expected to grow 110.8% year over year.HubSpot, Inc. HUBS currently has an Earnings ESP of +0.15% and a Zacks Rank of 1.HubSpot’s earnings beat estimates in each of the last four quarters, the average surprise being 5%. The company’s earnings for the second quarter of 2026 are expected to increase 37.9% year over year.Amphenol Corporation APH has an Earnings ESP of +1.12% and a Zacks Rank of 1.Amphenol’s earnings beat estimates in each of the last four quarters, the average surprise being 14.1%. The company’s earnings for the second quarter of 2026 are expected to climb 46.9% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report STMicroelectronics N.V. (STM) : Free Stock Analysis Report Dell Technologies Inc. (DELL) : Free Stock Analysis Report Amphenol Corporation (APH) : Free Stock Analysis Report HubSpot, Inc. (HUBS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). 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