Analyst Vivek Arya of Bank of America Securities reiterated a Sell rating on GlobalFoundries Inc, boosting the price target to $37.00.
TipRanks Cyber Monday Sale
- Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
Vivek Arya has given his Sell rating due to a combination of factors impacting GlobalFoundries Inc. While the company is positioning itself as a comprehensive supplier for AI technologies, the anticipated revenue benefits from these strategic moves are expected to materialize only in the long term, specifically beyond 2027. The immediate financial impact from recent acquisitions, such as MIPS, is limited, contributing only a small fraction to the company’s sales in the near term.
Moreover, Arya points out that GlobalFoundries faces several challenges, including muted gross margins, pricing pressures, and increasing competition, particularly from Asia in the smart mobile sector. These factors contribute to a more conservative outlook on the company’s recovery trajectory, leading to a reduction in sales and earnings estimates for the coming years. Despite the long-term potential in the AI market, these near-term headwinds and the company’s current valuation relative to its price objective support the Sell rating.
Arya covers the Technology sector, focusing on stocks such as Nvidia, Advanced Micro Devices, and Broadcom. According to TipRanks, Arya has an average return of 17.4% and a 59.40% success rate on recommended stocks.