STMicro’s $1B Data Center Bet: Why That 11% Stock Surge Is Riskier Than It Looks

(SeaPRwire) –   By: Alex Mercer

STMicro’s 11% stock jump Tuesday isn’t just about data center targets—it’s a pivot from its failing auto chip business. The Swiss chipmaker’s auto segment has been sluggish for over a year, and this new guidance is a Hail Mary to keep investors happy.

Official release says STMicro raised 2026 data center revenue to ~$1B (up from above $500M) and expects 2027 to double. But the subtext? Auto chips were its bread and butter, and now it’s chasing AI infrastructure’s power chips and optical cables. These are hot, but competition is fierce.

The company brags about 90% market share in SpaceX satellite chips since 2015, and early orbital data center talks. But SpaceX’s IPO buzz is carrying this narrative—orbital data centers have no revenue guidance. Valuation-wise, Simply Wall St’s DCF says it’s 38.6% overvalued (€62.82 vs €45.32), and FCF is still negative (-$702M).

STMicro’s AI and space plays are promising, but the supply chain for data center chips is getting crowded. Don’t buy the stock until it shows consistent positive cash flow.

Author bio: Alex Mercer, Tech Director at a Silicon Valley semiconductor firm, analyzes AI hardware supply chains and market trends.