Shares of STMicroelectronics (NYSE:STM) nearly doubled in 2017, rising 92.4%, according to data from S&P Global Market Intelligence. The semiconductor designer can thank Apple (NASDAQ:AAPL) for most of that surge.
Early last year, rumors started spreading about Apple including a new facial-recognition system in the then-upcoming iPhone X smartphone. The purported solution would require chips from STMicro, nearly doubling the company's revenue uptake per iPhone sold. With every titillating headline, STMicro's stock price edged just a little bit higher.
When Apple finally presented its latest and greatest flagship phone, the iPhone X indeed sported a facial-recognition system to make it easier to unlock your phone. STMicro was a key supplier of the necessary chips, and that sale boosted the chipmaker's third-quarter results by a lot. If analyst musings on this topic were in the right ballpark, the facial-recognition tools in iPhone X could lift STMicro's top-line sales nearly 10% higher over the smartphone's first year on the market.
The iPhone X is not STMicro's whole story, of course. The company is also landing deals in important growth markets such as automotive computing and smart-home controllers. Simply put, STMicroelectronics finds itself at the crossroads of several exciting growth markets, and its surging share prices should come as no surprise.