STMicroelectronics CEO Chery sees first-quarter revenue at usual levels

STMicroelectronics CEO Jean-Marc Chery projects first-quarter revenue to decline 10-11% sequentially from the upcoming fourth quarter, while still achieving approximately 20% year-over-year growth. Chery anticipates 2026 to commence at usual levels, asserting that a weaker-than-expected recovery in the current year will not necessitate inventory adjustments, providing a nuanced outlook for the semiconductor firm.

Analysis

STMicroelectronics (STM) CEO Jean-Marc Chery provided a mixed but ultimately reassuring outlook at a Morgan Stanley conference. He anticipates 2026 to commence at "usual levels" and stated that the current year's weaker-than-expected recovery will not necessitate inventory adjustments, indicating controlled supply chain management. This contributes to a mildly positive sentiment (0.25) for the stock.

Near-term revenue guidance suggests a sequential decline for Q1, with projections indicating a 10-11% decrease from the upcoming Q4. However, this sequential dip is offset by a robust year-over-year growth forecast of approximately 20% for Q1, highlighting underlying demand resilience despite short-term fluctuations.

The CEO's comments, particularly regarding inventory management and the strong year-over-year growth, suggest investor confidence in STM's long-term trajectory and its ability to navigate current market conditions without significant structural issues. The market impact of this guidance is rated as moderate (0.5), reflecting a balanced view of near-term sequential softness against longer-term stability and growth.

Key Decisions for Investors

• Monitor STM's Q4 earnings call for further details on sequential revenue drivers and inventory levels, as the projected Q1 sequential decline warrants closer examination.
• Evaluate the sustainability of the projected 20% year-over-year growth in Q1, considering broader semiconductor market trends and competitive dynamics.
• Assess the implications of the "no inventory adjustments" statement on future gross margins and pricing power, as this suggests a balanced supply-demand outlook for 2026.