STMicro: One of Our Top Picks in Technology as Near-Term Auto and EV Weakness Seems Overdone

Narrow-moat STMicroelectronics, or ST, is one of our top picks in the technology sector, as our fair value estimates of $66 for U.S. shares and EUR 63 for European shares offer an attractive margin of safety for long-term, patient investors, in our opinion. We continue to like the long-term secular tailwinds in the automotive end market, as ST should profit from increased chip content per car, especially in electric vehicles. The company has also achieved nice gross margin expansion in recent years, and we foresee the company maintaining these margins in the long run.