STMicroelectronics returns to growth as Apple supplier helps lift chip demand
Q4 revenue of $3.33 billion exceeds guidance, Personal Electronics segment drives recovery after year of decline
STMicroelectronics shares surged 3.3% in Thursday trading after the Swiss chipmaker reported fourth-quarter revenue that exceeded expectations, signaling a return to growth following a challenging year for the semiconductor industry.
The company reported net revenues of $3.33 billion for the quarter, marking a 0.2% increase year-over-year and beating the midpoint of its business outlook. The performance was driven primarily by strength in the Personal Electronics segment, which benefited from continued demand from key customers including Apple, according to the company's earnings announcement. Trading volume reached 12.35 million shares, more than double the stock's average daily volume.
The fourth-quarter results represent a notable turnaround after a difficult fiscal year 2025, during which total revenues declined 11.1% to $11.80 billion. The return to year-over-year growth in the final quarter suggests the broader chip cycle may be stabilizing, particularly in consumer electronics markets that had been sluggish throughout much of 2025.
"This quarter commenced the year-over-year growth dynamic," the company stated in its earnings materials, pointing to momentum in Personal Electronics as well as contributions from its Consumer Electronics and Computer Peripherals (CECP) and Industrial segments.
STMicroelectronics provides sensors, power management integrated circuits, and wireless connectivity chips for Apple's smartphones, tablets, and wearable devices. The Personal Electronics resurgence helped offset ongoing weakness in the company's Power and Discrete products segment, which saw revenue plunge 31.6% year-over-year and swung to an operating loss of $124 million.
Other segments showed more resilience. RF & Optical Communications revenue jumped 22.9% in the quarter, while Embedded Processing revenue increased 1.2% driven by general purpose microcontrollers. Analog products, MEMS and Sensors revenue rose 7.5%, with imaging applications contributing significantly.
For the first quarter of 2026, STMicroelectronics forecast net revenues of approximately $3.04 billion, representing an 8.7% sequential decline. While the projection reflects typical seasonal patterns following the holiday quarter, the company noted the forecast is "better than the average past seasonality" and expects the year-over-year growth dynamic that began in Q4 to accelerate.
Gross margin for the first quarter is projected at approximately 33.7%, including about 220 basis points of unused capacity charges. The company plans to invest between $2.0 billion and $2.2 billion in net capital expenditures for the full year 2026 as it continues to reshore manufacturing capacity and resize its global cost base.
The stock's rally on Thursday brought shares to $30.33, trimming year-to-date losses. Despite the recent gains, STMicroelectronics still trades below its 52-week high of $33.25 set earlier in the year. Analysts have a consensus price target of $31.76 on the shares, representing roughly 5% upside from current levels, according to market data.
Investors are watching whether the Personal Electronics recovery can sustain momentum through 2026, particularly given uncertain macroeconomic conditions that could weigh on consumer spending on high-end electronics. The company's ability to navigate the power and discrete segment downturn while maintaining margins in its more profitable business units will be critical to demonstrating a broader cyclical recovery.