Xanadu Stock Climbs on Multi-Year GlobalFoundries Manufacturing Partnership

GlobalFoundries reported a $270M Q3 net loss due to a $441M noncash share-issuance expense, but revenue rose 13% YoY to $1.9B. Excluding the expense, net income was $298M. CEO Tim Breen noted record gross margins and growth in key sectors. Q4 revenue is forecast at $2B, with a 47c EPS estimate and 30.7% gross margin. A $0.12 dividend was approved.

GlobalFoundries accelerated its silicon photonics revenue target to $1B by 2027, up from 2028. The company expects $500M in 2026 revenue and plans $4B in 2027 capital spending, partly funded by customer prepayments and a CHIPS award.

Wedbush cut GlobalFoundries' (GFS) price target to $45 from $72, reducing its valuation multiple to 17x earnings. Despite this, the company reported strong Q3 results, with revenue above guidance and record gross margins. Management expects continued margin improvements and data center growth, but warns of mobile segment weakness. GFS guided Q4 revenue in line with consensus, with higher gross margins and earnings.

Evercore ISI Group kept its Outperform rating on GLOBALFOUNDRIES but reduced its price target to $54 from $85, a 36.5% decrease. This implies a 33.9% upside from the Nov 4 close of $40.34. Recent analyst price targets for the company range from $45 to $110.

GlobalFoundries reports nearly $1 billion in custom chip design wins, expanding into processor IP and physical AI applications. The company aims to grow beyond wafer manufacturing, increasing value from customer chip development.

Qualcomm's stock fell over 6% after reporting mixed Q4 results, missing revenue expectations and providing weak guidance. Arm and GlobalFoundries also reported earnings, with Arm's stock down 2% and GlobalFoundries' flat. Qualcomm's revenue grew 8% YoY to $10.44B, missing estimates, while Arm's revenue rose 27% to $1.44B, beating estimates. GlobalFoundries reported 12% YoY revenue growth to $1.9B, exceeding expectations.