STMicroelectronics raised its data-center revenue target for this year and next a second time as demand for semiconductors to power artificial intelligence shows no sign of abating. The European chip maker, which counts Apple and Elon Musk's Tesla and SpaceX among its clients, said revenue from data centers should grow above $1 billion this year and well above $2 billion next year compared with previous guidance of about $1 billion in 2026 and roughly $2 billion in 2027.

The group had upgraded those forecasts in June. Sales grew 26% on year in the three months to June 27 to $3.49 billion, above company guidance of about $3.45 billion and analysts' forecast of $3.47 billion, according to Visible Alpha.

STMicroelectronics swung to a net profit of $222 million compared with a loss of $97 million a year earlier. Its gross profit—a closely watched measure of pricing power—climbed to nearly $1.22 billion from $926 million, generating a 34.8% gross margin. Analysts had forecast $209.9 million in net profit and $1.22 billion in gross profit, according to Visible Alpha.