15 Semiconductor Stocks Making Impressive Comeback From DeepSeek AI Dip

3. STMicroelectronics N.V. (NYSE:STM) 

STMicroelectronics N.V. is a developer, manufacturer, designer, and supplier of semiconductor products. It operates in analog, MEMS, and sensors groups; microcontrollers and digital ICs groups, and automotive and discrete group segments. The company distributes its products through retailers, distributors, and sales representatives. The stock is up 9.04% in the last week against the S&P 500’s 1.13% gains.

STM is likely to witness improving gross margins and inventories in the second half of the year, mainly due to the launch of newer smartphone models. The company is also trimming its workforce, which will not only help improve margins by the end of 2026 but will also drive a reduction of $300 million to $360 million in operating expenses by the second half of 2027.

There are multiple headwinds before all that good news materializes though. To begin with, the analysts are not very optimistic about the company’s short-term prospects. Q1 guidance was below expectations and the reason was inventory correction in ADAS (Advanced Driving Assitance Systems) at a major customer. Lower capacity reservation fees are also impacting the company’s revenues. The company is also facing competition in China in the MCU market, which may well force the company to use a Chinese foundry to stay competitive.