Why GlobalFoundries’ Stock Took a Nosedive Today – The Inside Scoop
Semiconductor stocks got rattled today—and GlobalFoundries (GF) led the plunge. Here’s why the chipmaker got hammered while the broader market yawned.
Earnings Miss or Market Panic?
GF’s Q2 earnings landed like a lead balloon, missing analyst expectations by a margin even Wall Street’s eternal optimists couldn’t spin. Revenue dipped, guidance softened, and suddenly every hedge fund manager remembered they ‘always had concerns’ about the foundry business.
The Crypto Angle (Because There Always Is One)
Rumors swirled that GF’s exposure to mining ASICs—once a golden goose—is now a liability as Bitcoin’s latest 20% correction spooked hardware buyers. Because nothing says ‘stable revenue stream’ like tying your fate to crypto’s mood swings.
What’s Next for the Chip Sector?
With TSMC and Samsung eating the advanced-node lunch, GF’s ‘specialist’ strategy looks shaky. Either they carve out a niche that doesn’t depend on crypto or tech giants’ whims—or become another cautionary tale in an industry that chews up second-tier players before breakfast.
Mixed performance across different specialty chip end markets
GlobalFoundries is a U.S.-based fab for "specialty" semiconductor manufacturing nodes. These are chips that aren't on the "leading-edge" but are important to several end markets across consumer electronics, autos, Internet of Things (IoT) devices, and a small segment in the periphery of data centers.
In the second quarter, GlobalFoundries posted revenue growth of 3.4% to $1.69 billion, with non-GAAP (adjusted) earnings per share (EPS) of $0.42, up 11% on the year. Both figures beat analyst expectations.
Yet while the overall quarter was good, there were a lot of mixed results underneath the surface. GlobalFoundries saw strong growth in autos and data center, along with decent growth in IoT devices; however, the company's largest segment in consumer electronics continues to struggle, and was down 10%.
And it doesn't appear the consumer segment is improving in the NEAR term, as GlobalFoundries issued highly disappointing guidance for Q3 revenue at $1.68 billion and adjusted EPS of $0.42. That guidance marks a small quarterly decline on both metrics, and was well below analyst consensus.
CEO Tim Breen noted, "As we await a return to meaningful growth across the consumer-driven end markets, I am pleased with the steps GF is taking to broaden the long term value proposition to our customers."
Image source: Getty Images.
GlobalFoundries isn't the most exciting chip stock, but it's getting cheap
As a U.S.-based fabrication company for specialty nodes, GlobalFoundries is more of a "geopolitical risk" play than a real strong AI semiconductor play. So, its biggest value is sort of as a hedge against potential war or disruption in the East Asia supply chain.
That being said, the stock is also getting fairly cheap as it sits at all-time lows. Shares now trade around 20 times this year's earnings expectations and just 14.5 times 2026 EPS expectations.
