STM Should I Buy
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STMicroelectronics NV (STM) is a good buy for a beginner investor with a long-term horizon and $50,000-$100,000 available for investment. The stock shows positive technical indicators, strong recent news catalysts, and hedge fund buying trends, despite weaker financial performance in the latest quarter. The acquisition of NXP's MEMS sensor division and partnerships with AWS highlight significant growth potential in automotive, industrial, and high-performance computing markets.
The stock is showing bullish momentum with MACD above 0 and positively contracting, RSI in the neutral zone at 68.421, and bullish moving averages (SMA_5 > SMA_20 > SMA_200). The current price of $33.61 is near the R1 resistance level of $33.999, suggesting potential for further upside.
Acquisition of NXP's MEMS sensor division for $950 million, enhancing automotive and industrial market capacity.
Multi-billion-dollar agreements with AWS to support high-performance computing infrastructure and semiconductor supply.
Strong supply capabilities demonstrated by shipping over 5 billion chips to SpaceX.
Hedge funds are significantly increasing their positions in STM, with a 2413.50% increase in buying over the last quarter.
Weak financial performance in 2025/Q3, with revenue, net income, EPS, and gross margin all declining YoY.
Analysts' ratings are mixed, with some firms maintaining Neutral or Equal Weight ratings, citing fair valuation and near-term headwinds.
In 2025/Q3, revenue dropped by -1.97% YoY to $3.187 billion, net income fell by -32.48% YoY to $237 million, EPS decreased by -29.73% YoY to $0.26, and gross margin declined by -12.02% YoY to 33.23%. These declines reflect challenges in the company's financial performance.
Analysts have mixed views on STM. Morgan Stanley raised its price target to EUR 24 but maintained an Equal Weight rating. Mizuho lowered its target to $28, citing fair valuation, while Berenberg raised its target to EUR 29 with a Buy rating. Analysts acknowledge STM's strong market position but highlight near-term headwinds in sectors like EV and analog components.
