STMicroelectronics shares jump 6% on expanded AWS partnership

Investing.com -- Shares in STMicroelectronics NV (NYSE: STM) jumped more than 6% on Monday after the European chipmaker announced an expanded strategic partnership with Amazon Web Services (NASDAQ: AMZN), boosting investor optimism about its exposure to fast-growing data centre and cloud infrastructure markets.

The Franco-Italian semiconductor group said the collaboration would see it become a key supplier for AWS’s next-generation compute infrastructure, spanning areas such as data centre connectivity, cloud-based electronic design automation (EDA) workloads and custom silicon.

Under the agreement, STMicroelectronics will issue warrants to AWS for up to 24.8 million ordinary shares, exercisable over seven years at an initial price of $28.38 per share, the company said.

Analysts at Morgan Stanley said the deal strengthens STMicroelectronics’ positioning in high-growth data centre silicon, an area management has already identified as a key driver of earnings from 2026 onward.

The brokerage noted that STM has guided for data centre revenues to rise from around $350 million in 2025 to $500 million in 2026, with a longer-term target of about $1 billion by 2030.

“Today’s announcement of an expanded collaboration with AWS deepens STM’s position with the leading CSP offering now custom analog silicon (including new power semis) and high performance microcontrollers,” Morgan Stanley said.

The broker described the agreement as structurally similar to STMicroelectronics’ past bespoke partnerships with large customers such as Apple and Tesla, and said it was "incrementally positive for both medium term revenue visibility and mix,” with the AWS relationship likely to become a more material contributor to the company’s data centre business over the coming years.

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