- STMicro posted solid Q4'21 results and offered very encouraging guidance for 2022, but I expect concerns to mount as to whether we've seen the peak of this chip cycle.
- The biggest near-term risks to STMicro are likely lower smartphone orders and a shift back to inventory builds in chip categories like MCUs.
- Even if there is a cyclical correction in '23-'24, STMicro is well-placed for strong long-term growth and margin leverage based on exposure to automation, electrification, 3D sensing, and so on.
- There is near-term risk of lower revenue and margin estimates, as well as multiple compression, but the price looks attractive on a longer-term basis.
For further details see:
STMicroelectronics Poised At The Edge Of The Cycle, And The Next Few Steps Are Into The Unknown