(Bloomberg) -- STMicroelectronics NV plunged the most in a year after the chipmaker forecast third-quarter sales that missed analysts' expectations, dimming hopes for a stronger recovery on the back of artificial intelligence data center demand.
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Third-quarter revenue is set to rise about 16% from a year earlier to $3.7 billion at the midpoint of guidance, the company said in a statement Thursday. That compares to an average analyst estimate of $3.79 billion, according to data compiled by Bloomberg.
Shares fell as much as 17%, the biggest intraday decline since July 2025. The stock is still up 119% in 2026, buoyed by the company's growing data center business. STMicro said that revenue growth will accelerate in the final quarter of the year as more orders come in for its chips serving satellites and data centers.
"Its outlook shows the building cyclical recovery across its end markets and continued acceleration in AI/data center growth, but expectations and shares have risen this year accordingly," Citi analysts including Andrew Gardiner said in a note. "Without estimate momentum today, shares may struggle in the near-term."
The ongoing AI infrastructure buildout has boosted demand for the many kinds of chips that can be used in data centers, from Nvidia Corp.'s cutting-edge GPUs to STMicro's semiconductors that support power management and connectivity. That has buoyed the Franco-Italian chipmaker's business, and Chief Executive Officer Jean-Marc Chery has pushed to expand beyond its core consumer electronics and automotive industries into higher growth areas.
"We anticipate a revenue growth acceleration in Q4, mainly driven by our engaged customer programs in AI data centers and LEO satellite communication," Chery said in the statement.
The company said revenue will be above $4 billion in the fourth quarter, a gain of more than 20% from a year ago, compared to analysts estimates of about $4.03 billion.
STMicro broke out AI-related revenue guidance for the first time in April and nearly doubled its 2026 forecast for the business in June. On Thursday, it raised expectations for AI sales slightly to above $1 billion this year and "well above $2 billion" in 2027. Previously, STMicro expected revenue from its data centers business to reach $1 billion this year and to double next year.