NVIDIA gets the headlines. ASML gets the analyst love. But STMicroelectronics — the Franco-Italian chipmaker nobody's talking about — beat both in 2026.
+106% since January. Double your money. If you'd invested €10,000 at the start of the year, you'd have €20,600 today.
And almost no one is talking about it.
The Story Behind the Surge
STMicroelectronics (ticker: STM) makes the chips in your car, in industrial machinery, and — increasingly — in AI data centers. The company is barely known outside Europe, but it's one of the world's largest chipmakers.
What happened in 2026?
Q2 results in July showed: revenue +26% to $3.49 billion. Profit back in the black after a loss year. And the surprise: microcontrollers +36%, AI communication chips +32% — exactly the segments riding the AI wave.
The automotive chip business (formerly the core) is growing slower (+4%) because China is crushing prices. But the AI division is exploding. STM reinvented itself — from an auto supplier to an AI infrastructure player.
The man behind it: CEO Jean-Marc Chery rebuilt the strategy in 2024. Instead of betting only on cars, STM invested heavily in high-performance chips for data centers. It was risky. Today it's paying off.
What This Means for You
STM proves: European tech stocks can compete with the US — if they bet on the right trends.
Anyone who invested €1,000 in STM a year ago would have nearly €2,000 today. That's more than NVIDIA in the same period (+89%).
But it's also a warning: STM is not NVIDIA. The stock trades at 50x expected earnings (P/E ~50). That's expensive. If AI euphoria fades or China keeps crushing auto chip prices, the stock could drop 20-30% fast.
How Pros Are Reacting
Institutional investors (hedge funds, pension funds) massively bought STM in H1 2026. George Soros' fund built new positions in European chip stocks in Q2 — STM was among them.
The reasoning: Europe has an AI chip monopoly in certain technologies (ASML in machines, STM in specialized sensors). As long as AI infrastructure grows, these companies grow with it.
But analysts are split. Goldman Sachs cut the price target from $67.50 to $60.50 in July and stayed at "Neutral." The reason: "Valuation is too high for a company still struggling to make its automotive division profitable."
First Steps for Beginners
If you're considering investing in European tech stocks, here are three things you should know:
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Chip stocks are cyclical. They rise sharply when the economy booms — and fall hard when it weakens. STM is +106% in 8 months. It can just as quickly become -30%.
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Europe has real tech champions. ASML, STM, Infineon, SAP — they're not as famous as US giants, but they dominate their niches. Investing in European tech makes you less dependent on US market moves.
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Valuation is everything. STM trades today at ~$51 per share with an expected annual profit of ~$1 per share. That means: you're paying $51 for $1 of earnings. Is that too much? It depends on whether you believe the AI boom continues.
I was naive enough in 2000 to buy Deutsche Telekom stock at €100 because "everyone said it would only go up." Today I look at valuations. STM is exciting — but not cheap.
Stay calm. Stay focused.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not an indicator of future results.