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1. Company Snapshot

1.a. Company Description

GLOBALFOUNDRIES 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.

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1.b. Last Insights on GFS

GlobalFoundries' recent performance was driven by its Q3 earnings beat, with quarterly earnings of $0.41 per share exceeding the Zacks Consensus Estimate of $0.38 per share. The company's solid financials, including $1.69B revenue, 26% gross margin, and $232M net income, also contributed to its positive momentum. Baird analysts expect a cyclical recovery, share gains, and growing demand for differentiated semiconductor technologies, maintaining an 'Outperform' rating with a $40 price target. The company's US manufacturing onshoring and diversified manufacturing across the US, Europe, Singapore, and China also provide resilience against trade tensions.

1.c. Company Highlights

2. GF Delivers Strong Q4 Results, Exceeding Guidance Across Revenue, Gross Margin, and EPS

GF reported strong fourth-quarter results, exceeding the midpoints of its guidance ranges across revenue, gross margin, and EPS. The company generated $1.83 billion in revenue, representing an 18% year-over-year increase, driven by growth in volume and ASP. Gross profit was $464 million, with a 25.4% gross margin, above the midpoint of the guidance range. Operating profit was $285 million, with a 15.6% operating margin, and net income was $256 million, with diluted earnings per share of $0.46.

Publication Date: Feb -22

📋 Highlights
  • Record Design Wins: in 2024 across all end markets, with continued momentum expected in 2025, driving revenue growth.
  • Automotive Revenue Growth: of 15% year-over-year, a new annual record, with key design wins and collaborations, including with NXP and ADM.
  • Modest Revenue Growth: expected in the first quarter of 2025, with a return to growth across key revenue and profitability metrics for the full year.
  • IoT Segment Recovery: , with strong design win momentum on 12 nanometer, 28-nanometer, and 22 FDX platforms, and expected benefits from WiFi 6E and WiFi 7 standards.
  • Improving Gross Margin Outlook: , with expectations of exiting the fourth quarter of 2025 with adjusted gross margins of approximately 30%, driven by design wins, improving demand, and a constructive pricing environment.

Strong Design Wins and Improving Demand Outlook

The company secured a record level of design wins in 2024, with a focus on design wins across all end markets. This momentum is expected to continue in 2025, with an improving demand outlook. In the automotive end market, revenue grew 15% year-over-year, reaching a new annual record for automotive revenue. In smart mobile devices, revenue grew slightly year-over-year despite a soft market, with a focus on content growth and secured design wins. In IoT, the company saw strong design win momentum on its 12 nanometer, 28-nanometer, and 22 FDX platforms, with partnerships with customers to enable low-power SoCs.

Guidance for 2025: Return to Growth Across Key Metrics

GF's guidance for the full year 2025 indicates a return to growth across key revenue and profitability metrics. The company expects modest year-over-year revenue growth in the first quarter, with total revenue expected to be between $1.55 billion and $1.6 billion. Excluding share-based compensation, total operating expenses are expected to be between $170 million and $190 million. Operating profit is expected to be between $151 million and $214 million. The company expects to exit the fourth quarter of 2025 with adjusted gross margins of approximately 30%. As Thomas Caulfield, CEO, stated, "Our story is taking share, growing profitability, and growing free cash flow."

Valuation: Pricing in Growth and Profitability

With a forward P/E ratio of 31.57, GF's stock is pricing in its expected growth and profitability. The company's price-to-sales ratio of 3.48 is also reflective of its strong financial performance. With a free cash flow yield of 5.12%, GF's stock offers an attractive dividend-free yield. As analyst estimates suggest an 11.4% revenue growth for next year, the stock's valuation appears reasonable.

3. NewsRoom

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GlobalFoundries Inc. (GFS) Discusses Market and Strategic Update on Physical AI and Ultra-Low Power Solutions Transcript

Dec -03

Source: seekingalpha.com

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GlobalFoundries Inc. (GFS) Presents at UBS Global Technology and AI Conference 2025 Transcript

Dec -02

Source: seekingalpha.com

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GlobalFoundries and Navitas Semiconductor Partner to Accelerate U.S. GaN Technology and Manufacturing for AI Datacenters and Critical Power Applications

Nov -20

Source: globenewswire.com

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GlobalFoundries and BAE Systems Collaborate on Semiconductors for Space

Nov -19

Source: globenewswire.com

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GlobalFoundries buys Singapore's Advanced Micro Foundry in push to speed up AI data center networks

Nov -18

Source: reuters.com

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GlobalFoundries Acquires Advanced Micro Foundry, Accelerating Silicon Photonics Global Leadership and Expanding AI Infrastructure Portfolio

Nov -18

Source: globenewswire.com

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GlobalFoundries Inc. $GFS Shares Sold by Bank of New York Mellon Corp

Nov -17

Source: defenseworld.net

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GlobalFoundries (NASDAQ:GFS) vs. Synaptics (NASDAQ:SYNA) Critical Contrast

Nov -17

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.00%)

6. Segments

Semiconductors

Expected Growth: 8.0%

The 8.0% growth in Semiconductors from GLOBALFOUNDRIES Inc. is driven by increasing demand for advanced chipsets, 5G adoption, and rising investments in AI, IoT, and automotive technologies. Strong performance in 7nm and 5nm nodes, coupled with capacity expansions, also contribute to this growth.

7. Detailed Products

Leading-Edge FinFET

GLOBALFOUNDRIES' Leading-Edge FinFET technology provides high-performance and low-power solutions for advanced computing, mobile, and networking applications.

RF SOI

GLOBALFOUNDRIES' RF SOI (Silicon-on-Insulator) technology offers high-performance and low-power solutions for radio frequency (RF) and millimeter wave (mmWave) applications.

FD-SOI

GLOBALFOUNDRIES' FD-SOI (Fully Depleted Silicon-on-Insulator) technology provides low-power and high-performance solutions for IoT, automotive, and industrial applications.

BCD (Bipolar-CMOS-DMOS)

GLOBALFOUNDRIES' BCD technology offers high-voltage and high-current capabilities for power management, automotive, and industrial applications.

ASIC (Application-Specific Integrated Circuit)

GLOBALFOUNDRIES' ASIC technology provides customized and optimized solutions for specific applications, such as data center, artificial intelligence, and 5G infrastructure.

SiGe (Silicon-Germanium)

GLOBALFOUNDRIES' SiGe technology offers high-performance and low-power solutions for wireless, radar, and millimeter wave applications.

8. GLOBALFOUNDRIES Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

GLOBALFOUNDRIES Inc. faces moderate threat from substitutes, as customers have limited alternatives for advanced semiconductor manufacturing services.

Bargaining Power Of Customers

GLOBALFOUNDRIES Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

GLOBALFOUNDRIES Inc. relies on a few key suppliers for critical components, giving them some bargaining power, but the company's scale and diversification mitigate this risk.

Threat Of New Entrants

The high barriers to entry in the semiconductor manufacturing industry, including significant capital expenditures and technological expertise, make it difficult for new entrants to challenge GLOBALFOUNDRIES Inc.'s position.

Intensity Of Rivalry

The semiconductor manufacturing industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 17.60%
Debt Cost 4.53%
Equity Weight 82.40%
Equity Cost 12.01%
WACC 10.69%
Leverage 21.36%

11. Quality Control: GLOBALFOUNDRIES Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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NVIDIA

A-Score: 5.3/10

Value: 0.0

Growth: 10.0

Quality: 9.2

Yield: 0.0

Momentum: 8.0

Volatility: 4.7

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Analog Devices

A-Score: 4.8/10

Value: 1.1

Growth: 4.6

Quality: 7.3

Yield: 4.0

Momentum: 5.0

Volatility: 7.0

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GLOBALFOUNDRIES

A-Score: 3.7/10

Value: 5.4

Growth: 5.0

Quality: 4.2

Yield: 0.0

Momentum: 3.0

Volatility: 4.7

1-Year Total Return ->

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AMD

A-Score: 3.6/10

Value: 0.2

Growth: 6.8

Quality: 6.6

Yield: 0.0

Momentum: 5.0

Volatility: 3.0

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Intel

A-Score: 3.5/10

Value: 4.1

Growth: 1.2

Quality: 3.2

Yield: 1.0

Momentum: 9.0

Volatility: 2.7

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ON Semiconductor

A-Score: 3.3/10

Value: 2.8

Growth: 6.9

Quality: 5.7

Yield: 0.0

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

37.58$

Current Price

37.58$

Potential

-0.00%

Expected Cash-Flows