A Look at GlobalFoundries (GFS) Valuation Following Strong Q3 Results and Upbeat Outlook

GlobalFoundries (GFS) posted quarterly results that came in above expectations, driven by strong performance in automotive, communications infrastructure, and data center sectors. The company also issued upbeat guidance for the fourth quarter.

See our latest analysis for GlobalFoundries.

Despite robust momentum in automotive and data center markets and a string of upbeat earnings surprises, GlobalFoundries’ share price has struggled, with a 1-year share price return of -22.41% and a total shareholder return of -22.28%. Management continues to highlight long-term opportunities in AI and specialty semiconductors. Recent analyst upgrades and continued investments in next-gen manufacturing signal that sentiment could shift as market recovery progresses.

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With analyst sentiment mixed and the share price still well below recent targets, investors face a crucial question. Is GlobalFoundries trading at an attractive discount, or has the market already accounted for its future growth?

Most Popular Narrative: 16.4% Undervalued

With GlobalFoundries’ narrative fair value at $39.43 and a last close of $32.96, the consensus backs significant upside if ambitious growth targets materialize. The narrative captures why the gap between price and potential is drawing renewed attention.

The company's focus on differentiated technologies (such as FD-SOI, RF, and power management platforms) and its recent MIPS acquisition strengthens its value proposition in edge AI, automotive, and data center markets. This approach deepens customer partnerships and enables premium pricing, which is likely to drive sustained improvements in revenue visibility and margin stability.

Read the complete narrative.

Want to know why this narrative expects rising margins and a step-change in revenue? The full story is built on high expectations for innovation and a bold profit turnaround. What if analysts are projecting a leap few investors have priced in? Uncover the forecasts pushing this target higher.

Result: Fair Value of $39.43 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent pricing pressures and GlobalFoundries' limited presence in advanced chip technologies could still challenge the bullish growth narrative in the future.

Find out about the key risks to this GlobalFoundries narrative.

Another View: Playing the Ratios

Looking at the price-to-sales ratio, GlobalFoundries appears attractively valued versus its US semiconductor peers, trading at 2.7x compared to the industry average of 5x and a peer average of 6.2x. However, since its fair ratio is only 2.5x, there may not be as much upside as headline comparisons suggest. Does this narrow gap signal a limited margin of safety?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out GlobalFoundries for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 897 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own GlobalFoundries Narrative

If you see things differently or want the numbers to tell your story, feel free to craft your own perspective from scratch in just minutes: Do it your way

A good starting point is our analysis highlighting 1 key reward investors are optimistic about regarding GlobalFoundries.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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