STMicroelectronics' Security Chip to Boost Mobile Payments

STMicroelectronics N.V. STM in collaboration with Giesecke & Devrient (G&D) and FitPay has developed the world’s first secure software and hardware solution for mobile payments on wearable devices such as smartwatches.

Notably, STMicroelectronics’ trusted ST54E security chip has been utilized to develop the solution and is pre-approved for use by original equipment manufacturers (OEMs) in their wearable devices to facilitate integrated tokenized payments either through Visa or MasterCard.

The introduction of the solution will not only make card payments on wearables easier but will also enable wearable device OEMs to focus more on the developmental aspects of their products.

Moreover, it will also enable end users to register various payment cards from multiple banks and payment networks with the wearable device, paving the way for seamless contactless payment, irrespective of the operating system used by the receiving device.

STMICROELECTRON Price and Consensus

STMICROELECTRON Price and Consensus | STMICROELECTRON Quote

What Does this Mean for STMicroelectronics?

As per an IDC report, worldwide fitness wearables shipments are estimated to reach a whopping 213.6 million units in 2020 at a CAGR of 20.3%. Notably, watches and wristbands are projected to comprise the lion’s share of wearables shipments with watches alone having a 52.1% market share followed by wristbands, eyewear, clothing and others.

Given the enormous growth potential the wearables sector has to offer, semiconductor companies such as STMicroelectronics look poised for steady growth. 

We expect to witness greater adoption of the solution by large wearables manufacturers such as Apple AAPL, Fitbit FIT, Garmin and Samsung going forward.

Stock Performance Overview

Shares of STMicroelectronics have outperformed the broader Zacks Semiconductor-General industry over the last 12 months. While the industry generated a positive return of 32.1%, the stock returned a decent 67.6%.

The outperformance of the stock could be attributed to strong performance from the STM32 line of microcontrollers. Moreover, continuing design wins for high end smartphones as well as autos could have boosted the stock price.

Zacks Rank & Key Pick

At present, STMicroelectronics carries a Zacks Rank #2 (Buy).

A better-ranked stock in the broader technology space is NVIDIA Corporation NVDA, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Notably, the consensus estimate for NVIDIA’s current year has improved to $2.43 from $1.86 over the last 30 days.

Zacks’ Best Private Investment Ideas

In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?

Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
APPLE INC (AAPL): Free Stock Analysis Report
 
STMICROELECTRON (STM): Free Stock Analysis Report
 
NVIDIA CORP (NVDA): Free Stock Analysis Report
 
FITBIT INC (FIT): Free Stock Analysis Report
 
To read this article on Zacks.com click here.