GlobalFoundries (GFS) Q3 2026 Earnings Call Transcript

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.

GLOBALFOUNDRIES reported record gross margins in Q3 2026, driven by a shift toward high-growth sectors like optical networking and automotive. The company accelerated its $1B silicon photonics revenue target to 2027 and plans $4B in net CapEx for 2027. It expects a 10% free cash flow margin in 2026 and a 40% gross margin by 2028. The U.S. government will hold a 7% equity stake following CHIPS Act funding. Partnerships with TSMC and others support capacity expansion and margin growth.

GLOBALFOUNDRIES Inc (GFS) reported record non-IFRS gross margin of 31.4% for Q3 2026, up 540 bps YoY, with revenue and profitability at the high end of guidance. Communications infrastructure and data center revenue grew 81% YoY, driven by silicon photonics and silicon germanium demand. The company expects silicon photonics revenue to reach a $1 billion annualized run rate by exit 2027, a year ahead of prior expectations.

Jefferies reduced its price target for GlobalFoundries (GFS) to $50 from $60, citing capex concerns, while maintaining a Hold rating. The stock is down 36% over six months. The company reported in-line revenue guidance, strong margins, and EPS of $1.28 over the last year. Silicon photonics growth and capacity expansion support demand, but $4B in 2027 capex and share dilution may limit upside.