STM’s revenue party hit a small EPS pothole

Revenue’s doing the heavy lifting

STMicroelectronics came out swinging in Q1 2026, with revenue up 23% year over year to $3.095 billion and just ahead of Wall Street’s $3.039 billion target. That’s the kind of top-line beat that makes investors sit up a little straighter, especially when the stock is already flirting with fresh highs.

But EPS brought the plot twist

The good vibes got a dent from adjusted EPS of 13 cents, which missed the 17-cent consensus. Gross margin improved to 33.8% and operating margin ticked up too, but the company is still working through the messier part of its manufacturing-footprint reset — the corporate version of moving apartments while pretending everything is fine.

AI, autos, and a little help from the hyperscalers

Management sounded upbeat about demand, calling out stronger bookings, improving inventory trends, and AI-linked programs as key tailwinds. CEO Jean-Marc Chery also pointed to collaborations with Amazon Web Services and NVIDIA as ways ST is pushing deeper into AI data centers, while automotive and industrial chips keep the core business humming.

The part investors will actually care about

The biggest tell may be guidance: STMicroelectronics sees Q2 revenue of $3.33 billion to $3.57 billion, comfortably above estimates. That suggests the growth engine is still revving, even if profitability is recovering more slowly than bulls would like.

Big picture: this wasn’t a flawless quarter, but it was the kind of messy-good update the market loves — solid growth, better outlook, and just enough AI flavor to keep the narrative spicy.