STMicroelectronics Shares Surge +11% After Data Center Ambitions Upgrade

Doubled Ambition in Data Centers Boosts Value

STMicroelectronics surged by 11.4% to €66.06, leading the CAC 40 which gained 0.65%. The stock reached €66.11 during the session, a new five-year high surpassing the previous record of €66.10. This movement follows a significant upgrade in the group's ambitions for data centers, announced this Tuesday. STMicroelectronics now targets approximately $1 billion in revenue by 2026 from this activity, up from 'just over $500 million' previously expected, with the potential to double in 2027. The demand for artificial intelligence infrastructure is cited as the main driver. The announcement coincides with Jean-Marc Chéry's speech at the BNP Paribas Exane CEO conference in Paris this June 2nd. The session also benefited the entire sector: Micron climbed 6.64% and Nvidia 6.26% on Wall Street at Monday's close, while ASML advanced 1.71% in Amsterdam.

A Rally Pushing the Stock 132% Above Its 200-Day Moving Average

With an increase of nearly 14% over the week and 132.5% over three months, the stock continues a momentum that began in February. The price is now 22.4% above its MM20 (€53.98) and 132.3% above its MM200 (€28.44), a rarely seen gap that illustrates the extent of the revaluation. The RSI at 72 indicates momentum tension, in overbought territory. In terms of valuation, the stock is trading at about 63.1 times the earnings expected for the current fiscal year and 33.8 times those of the next fiscal year, according to the consensus of surveyed analysts. This high multiple reflects the anticipation of a strong acceleration in results related to AI and data centers. The sectoral context remains supportive: U.S. industrial production grew by 1.4% year-on-year in April, and the Chinese manufacturing PMI came out at 50.3, indicating expansion. The resistance of €59.84, breached at the beginning of the week, now serves as the first technical support for the current sequence.