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Investing.com -- JPMorgan has placed STMicroelectronics NV (EPA:STMPA) and Infineon (OTC:IFNNY) Technologies (ETR:IFXGn) on Positive Catalyst Watch, citing improving trends in the analog semiconductor space and expectations for better-than-feared second-quarter results.
For STMicro, JPMorgan highlights a turnaround in the microcontroller (MCU) market, particularly in China, where order activity is showing signs of recovery.
The bank notes that STMicro’s MCU revenue had dropped by half in the first quarter of 2025 from its peak in the second quarter of 2023. As inventory correction in this segment eases, JPMorgan analysts see a potential for an earlier rebound.
“Our estimates were already pricing a recovery in revenue in 4Q25, but in this note we have raised estimates in 3Q25 itself,” analysts wrote. Their forecast now stands 5% ahead of the Bloomberg consensus for full-year 2025 (FY25) revenue and 32% ahead on EBIT.
Despite the improved outlook, JPMorgan maintains a Neutral rating on STMicro, pointing to tariff-related risks and the possibility that recent demand may be the result of short-term pull-forward effects.
Infineon has also been placed on Positive Catalyst Watch ahead of its fiscal third-quarter results in early August. JPMorgan expects the company to raise guidance, reversing a previous haircut to forecasts tied to tariff concerns.
“Infineon has guided for FY25 incorporating a haircut of ~€400m due to potential negative impact from tariffs to revenue. None of Infineon’s peers have seen this negative impact from tariffs and thus it is unlikely that Infineon will see this impact when it guides in early August,” the analysts said.
They expect Infineon to reinstate previously removed revenue in its September quarter guidance, enabling the company to guide both Q3 and full-year FY25 above current market consensus.
JPMorgan has reinstated this €400 million into its own model, putting its September quarter revenue forecast 5.8% ahead of consensus and full-year 2025 revenue 1.4% higher.
Segment results are estimated to be 15.7% ahead of consensus for the quarter and 2.5% above for the year.
The analysts believe the recent signs of restocking and a reduced bearish view on semiconductor capital equipment could offer near-term upside for analog semiconductors more broadly, particularly as the market anticipates upcoming earnings.