STMicroelectronics set for profit boost by 2027, driven by AI, industrial automation, and space tech growth.

STMicroelectronics is expected to significantly increase profitability by the end of fiscal year 2027, supported by growth in industrial automation, AI data centers, and space technology sectors. Although there may be short-term margin pressures due to transitions in fabrication facilities, the company aims to achieve 40% gross margins as these upgrades complete. Strong order backlog and exposure to long-term growth markets provide a positive outlook despite potential industry downcycles. The analyst maintains a Buy rating with a $65 price target based on durable growth and operating leverage.