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GlobalFoundries Inc (GFS)
NASDAQ:GFS
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GlobalFoundries Inc
(NASDAQ:GFS)
Rating:51Neutral
Price Target:
$34.00
▲(3.53% Upside)
Positive Factors
Customer Engagement
Robust design-win momentum with deep customer engagement, with 90% of recent design wins achieved on a sole-source basis, indicating deep customer engagement and confidence in its specialized capabilities.
Government Support and Investment
Investments under the CHIPS Act in the U.S. are driving expansions at GFS’s New York facility, including advanced packaging and photonics capabilities, supported by approximately USD1.5 billion in federal funding.
Strategic Positioning
GFS has a differentiated position in Silicon Photonics and autos, which now make up a quarter of total wafer revenue.
Negative Factors
Macroeconomic Headwinds
Macroeconomic headwinds in the second half are expected, especially affecting consumer-related mobile and IoT segments.
Market Competition
The average selling price of wafers is declining, which indicates increased competitive pressures.
Pricing Power
GFS has low pricing power due to a high smartphone mix, which affects its ability to raise prices.
GlobalFoundries Inc (GFS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$17.48B
Dividend YieldN/A
Average Volume (3M)2.11M
Price to Earnings (P/E)28.2
Beta (1Y)1.69
Revenue Growth-0.65%
EPS Growth-114.26%
CountryUS
Employees13,000
SectorTechnology
Sector Strength96
IndustrySemiconductors
Share Statistics
EPS (TTM)0.42
Shares Outstanding552,912,840
10 Day Avg. Volume3,400,428
30 Day Avg. Volume2,111,293
Financial Highlights & Ratios
PEG Ratio0.71
Price to Book (P/B)2.20
Price to Sales (P/S)3.52
P/FCF Ratio21.63
Enterprise Value/Market Cap1.14
Enterprise Value/Revenue2.91
Enterprise Value/Gross Profit12.25
Enterprise Value/Ebitda13.62
Forecast
1Y Price Target
$41.03Price Target Upside24.94% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
GlobalFoundries Inc Business Overview & Revenue Model
Company DescriptionGLOBALFOUNDRIES Inc. operates as a semiconductor foundry worldwide. It manufactures integrated circuits, which enable various electronic devices that are pervasive. The company manufactures a range of semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, power management units, and microelectromechanical systems, as well as offers mainstream wafer fabrication services and technologies. The company was founded in 2009 and is based in Malta, New York.
How the Company Makes MoneyGlobalFoundries Inc primarily makes money by manufacturing semiconductors for a diverse client base. The company operates on a 'fabless' model, where it does not produce its own branded semiconductor products but instead manufactures chips for other companies. Revenue is generated through multi-year contracts with these clients, who rely on GlobalFoundries' expertise in producing high-quality, customized semiconductor solutions. The company benefits from strategic partnerships with major technology firms, which provide a steady stream of orders and revenue. Additionally, GlobalFoundries invests in research and development to maintain its competitive edge and expand its portfolio of technology offerings, further contributing to its earnings.
GlobalFoundries Inc Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: -9.23%|
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
GlobalFoundries reported strong financial results that exceeded guidance in several key metrics, highlighted by growth in the automotive and communications sectors and a significant increase in design wins. However, challenges remain in the smart mobile devices and IoT markets, with ASP declines and tariff-related headwinds. Despite these challenges, the company's strategic initiatives, including the MIPS acquisition, position it well for future growth.Q2-2025 Updates
Positive Updates
Exceeding Guidance Midpoints
GlobalFoundries delivered strong financial results in Q2 2025, exceeding the guidance midpoints for revenue, gross margin, and operating margin. Earnings per share exceeded the high end of the guidance range.
Automotive and Communications Growth
Both the automotive and communications infrastructure and data center end markets demonstrated double-digit year-over-year revenue growth for the third consecutive quarter. Automotive grew over 36% year-over-year and represented nearly 1/4 of total wafer revenue.
Record Design Wins
GlobalFoundries secured nearly 200 design wins across end markets, setting a new quarterly record and almost doubling the number from a year ago.
Strong Free Cash Flow
The company generated $277 million of adjusted free cash flow in Q2 2025 and remains on track to generate over $1 billion of adjusted free cash flow in 2025.
MIPS Acquisition
GlobalFoundries announced a definitive agreement to acquire MIPS, a leading supplier of AI and processor IP, expected to enhance their edge AI offerings and add significant value for customers.
Negative Updates
Smart Mobile Devices Revenue Decline
Revenue from smart mobile devices decreased approximately 10% year-over-year due to a reduction in customer underutilization payments and certain ASP adjustments.
Slower Recovery in IoT Markets
The smart mobile devices and home and industrial IoT end markets experienced a slower recovery, impacted by geopolitical uncertainties and global trade tensions.
ASP Declines
Average selling price per wafer was down high single-digit percentage year-over-year due to product mix, pricing adjustments, and a reduction in customer underutilization payments.
Tariff-Related Headwinds
Potential supply chain cost impacts associated with tariff uncertainties are expected to be limited to roughly $20 million in the second half of 2025.
Company Guidance
During GlobalFoundries' second quarter 2025 earnings call, the company reported strong financial results, exceeding guidance midpoints for revenue, gross margin, and operating margin, with earnings per share surpassing the high end of the guidance range. The company generated $277 million of adjusted free cash flow and is on track to achieve over $1 billion in adjusted free cash flow for the year. Revenue for the quarter was $1.688 billion, a 6% increase sequentially and a 3% year-over-year increase, with wafer shipments rising 7% sequentially and 12% year-over-year. Automotive and communications infrastructure and data center end markets demonstrated double-digit year-over-year revenue growth, while smart mobile devices and home and industrial IoT markets faced slower recovery. The company expects third-quarter revenue of $1.675 billion, with a gross margin of approximately 25.5%, reflecting sequential and year-over-year growth. GlobalFoundries continues to pursue growth opportunities and is optimistic about its diversified and flexible manufacturing strategy, including a China-for-China strategy to meet local demand.GlobalFoundries Inc Financial Statement Overview
Summary
GlobalFoundries Inc. shows a mixed financial health profile. The balance sheet is robust with low leverage, but the income statement reveals operational inefficiencies and profitability challenges. Cash flows are strong but declining, indicating potential liquidity concerns if not addressed.Income Statement
The income statement shows a volatile trend with revenue declining from $8.1B in 2022 to $6.786B TTM but with slight growth compared to the previous year. Gross profit margin TTM is approximately 23.76%, down from 28.28% in 2022, indicating reduced efficiency. The net profit margin is negative due to losses, impacting the overall profitability. The EBIT and EBITDA margins have also deteriorated, reflecting operational challenges.55
Neutral
Balance Sheet
The balance sheet reflects a solid equity base with a debt-to-equity ratio of approximately 0.15 TTM, indicating low leverage. The equity ratio is strong at about 67.09%, offering financial stability. However, the declining equity from 2022 to TTM suggests potential risks if trends continue.70
Positive
Cash Flow
Cash flow analysis reveals a strong operating cash flow to net income ratio, indicating solid cash generation relative to reported losses. The free cash flow remains positive, though it has declined from the previous year, reflecting less cash available after capital expenditures. The free cash flow growth rate has been negative, highlighting a potential concern.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.84B | 6.75B | 7.39B | 8.11B | 6.58B | 4.85B |
| Gross Profit | 1.63B | 1.65B | 2.10B | 2.24B | 1.01B | -712.72M |
| EBITDA | 1.46B | 1.50B | 2.64B | 3.27B | 1.56B | 1.31B |
| Net Income | -115.00M | -265.00M | 1.02B | 1.45B | -254.00M | -1.35B |
Balance Sheet | ||||||
| Total Assets | 16.80B | 16.80B | 18.04B | 17.84B | 15.03B | 12.32B |
| Cash, Cash Equivalents and Short-Term Investments | 3.10B | 3.39B | 3.47B | 2.97B | 2.94B | 908.08M |
| Total Debt | 1.68B | 2.32B | 2.75B | 2.51B | 2.01B | 2.80B |
| Total Liabilities | 5.12B | 5.97B | 6.89B | 7.88B | 7.00B | 5.08B |
| Stockholders Equity | 11.41B | 10.78B | 11.10B | 9.91B | 8.03B | 7.18B |
Cash Flow | ||||||
| Free Cash Flow | 1.02B | 1.10B | 321.00M | -435.00M | 1.07B | 413.41M |
| Operating Cash Flow | 1.59B | 1.72B | 2.13B | 2.62B | 2.84B | 1.01B |
| Investing Cash Flow | -773.00M | -1.13B | -1.88B | -4.06B | -1.45B | -366.17M |
| Financing Cash Flow | -1.22B | -785.00M | -212.00M | 842.00M | 650.00M | -732.74M |
GlobalFoundries Inc Technical Analysis
Negative
32.84
Price Trends
38.14
Negative
37.04
Negative
39.33
Negative
Market Momentum
-1.89
Positive
31.63
Neutral
8.72
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GFS, the sentiment is Negative. The current price of 32.84 is below the 20-day moving average (MA) of 37.34, below the 50-day MA of 38.14, and below the 200-day MA of 39.33, indicating a bearish trend. The MACD of -1.89 indicates Positive momentum. The RSI at 31.63 is Neutral, neither overbought nor oversold. The STOCH value of 8.72 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GFS.
GlobalFoundries Inc Risk Analysis
GlobalFoundries Inc disclosed 66 risk factors in its most recent earnings report. GlobalFoundries Inc reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
GlobalFoundries Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $16.95B | 13.57 | 10.98% | 7.19% | 5.46% | -26.72% | |
66 Neutral | $21.95B | 20.40 | 10.97% | 3.56% | 4.86% | 6.44% | |
63 Neutral | $19.26B | 43.94 | 5.72% | ― | -17.93% | -75.83% | |
61 Neutral | $36.31B | 7.01 | -9.37% | 2.01% | 7.73% | -9.28% | |
60 Neutral | $22.78B | 36.70 | 3.72% | 1.24% | -22.97% | -78.58% | |
58 Neutral | $32.89B | 84.25 | -2.24% | 2.82% | -35.70% | -113.08% | |
51 Neutral | $17.48B | 28.15 | -1.01% | ― | -0.65% | -114.26% |
* Technology Sector Average
Performance Comparison
GFS
GlobalFoundries Inc
32.84
-12.02
-26.79%
ASX
ASE Technology Holding Co
10.13
0.64
6.74%
MCHP
Microchip
64.50
-12.49
-16.22%
ON
ON Semiconductor
50.01
-22.90
-31.41%
STM
STMicroelectronics
26.25
-3.40
-11.47%
UMC
United Micro
6.81
-1.53
-18.35%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.