The strong Q2 beat and raised guidance, especially the AI datacenter revenue ramp, support a positive re-rating. Monitor Q3 execution, PD segment recovery, and the pace of convertible bond dilution. The Q4 revenue acceleration commentary is a key catalyst to watch.
Price Chart
Executive Summary
STMicroelectronics reported Q2 2026 earnings with net revenues of $3.49 billion (+26% YoY), a swing to GAAP net income of $222 million ($0.24 diluted EPS) from a $97 million loss a year ago, and non-GAAP EPS of $0.31. The company guided Q3 revenues to $3.70 billion (+6.2% QoQ), raised its 2026 AI datacenter revenue target to above $1 billion, and expects Q4 revenues to exceed $4 billion. This is a strong beat with a clear inflection in profitability and accelerating growth driven by AI and embedded processing.
Key Facts
- Q2 2026 net revenues of $3.49 billion, up 26.0% YoY and 12.7% QoQ, above the mid-point of guidance.
- GAAP net income of $222 million ($0.24 diluted EPS) vs. net loss of $97 million ($(0.11)) in Q2 2025.
- Non-GAAP net income of $291 million ($0.31 diluted EPS), up 410.5% YoY.
- Q3 2026 guidance: net revenues $3.70 billion (+6.2% QoQ, +16.2% YoY) and gross margin ~37.0%.
- Management expects Q4 revenues above $4 billion, implying H2 vs H1 growth above normal 15% seasonality.
- Raised AI datacenter revenue ambition to above $1 billion in 2026 and well above $2 billion in 2027.
- Issued $1.5 billion dual-tranche convertible bond and announced early redemption of $750 million bond due 2027.
- Free cash flow turned positive at $75 million vs. negative $152 million a year ago; inventory days improved to 126 from 166 YoY.
Financial Impact
Q2 revenue beat mid-point by 110bps; EPS swung from -$0.11 to +$0.24; Q3 guidance implies 16% YoY revenue growth.
Risk Factors
- Power and Discrete (PD) segment operating loss widened to -$99 million (-21.4% margin) vs. -$56 million a year ago.
- Convertible bond issuance adds $1.5 billion in potential dilution; early redemption of $750 million bond partially offsets.
- Forward-looking guidance assumes no further adverse changes in global trade tariffs, which remain a macro risk.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (STM) — Batch item 1 | 0000932787-26-000052 |
| Document: 0000932787-26-000052-index-headers.html | 0000932787-26-000052 |
| Document: 0000932787-26-000052-index.html | 0000932787-26-000052 |
| Document: 0000932787-26-000052.txt | 0000932787-26-000052 |
| 6-K Filing (STM) — Batch item 5 | 0000932787-26-000052 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 2, 2026 4w ago | Press Release | $50.71 $53.36 | ▲ +5.23% | ▲ +5.56% | $56.79 (+11.99%) |
Aug 31, 2026 4w ago | 6-K | $50.14 $53.24 | ▲ +6.18% | ▲ +6.37% | $56.79 (+13.26%) |
Aug 25, 2026 5w ago | 6-K | $49.46 $51.63 | ▲ +4.39% | ▲ +3.15% | $56.79 (+14.82%) |
Aug 10, 2026 7w ago | 6-K | $54.35 $51.97 | ▼ −4.38% | ▼ −3.46% | $56.79 (+4.49%) |
Aug 4, 2026 8w ago | 6-K | $54.22 $49.40 | ▼ −8.89% | ▼ −7.65% | $56.79 (+4.74%) |
Jul 23, 2026 10w ago | 6-K | $53.49 $49.92 | ▼ −6.67% | ▼ −9.98% | $56.79 (+6.17%) |
Jul 23, 2026 10w ago | Press Release | $53.49 $49.92 | ▼ −6.67% | ▼ −9.98% | $56.79 (+6.17%) |
Jul 6, 2026 12w ago | 6-K | $71.39 $52.39 | ▼ −26.61% | ▼ −26.05% | $56.79 (−20.45%) |
Jul 3, 2026 13w ago | Press Release | $68.35 $53.06 | ▼ −22.37% | ▼ −21.96% | $56.79 (−16.91%) |
Jun 16, 2026 15w ago | 6-K | $73.36 $62.77 | ▼ −14.44% | ▼ −15.75% | $56.79 (−22.59%) |
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