Global Foundries Q4 25 – Good Timing

GlobalFoundries may have turned a corner.

• GlobalFoundries reported good Q4 25 results and guidance, which combined with some nicely timed strategies, put it in a good position to continue growing even if there is a correction in the mad dash to do everything with AI.
• Q4 25 revenues / EPS were $1.83bn / $0.55, nicely ahead of expectations of $1.80bn / $0.47.
• Guidance for the coming three months was also strong with revenues of $1.60bn – $1.65bn ($1.63bn) / $0.30 – $0.40 ($0.35), which was again ahead of expectations.
• Key to this report is revenue growth, which in Q4 25 accelerated to 8% YoY and is a considerable improvement over the last 3 years, where revenues have basically treaded water.
• This is going to slow in Q1 26 to 4.4% YoY, but the tailwinds of its AI adjacency and geopolitics make me think that this is an estimate that should not be too hard to meet or even beat.
• Growth has been the key issue for GlobalFoundries for some time and is what has held back the share price, and now we are seeing the green shoots of growth, explaining the recent rally.
• This is particularly good as its largest end market, smart mobile devices, is going to have a difficult 2026 as a result of the memory shortage, but its presence in the data centre and automotive look set to allow it to more than offset that weakness.
• This is also where the company’s bets on silicon photonics and its acquisition of semiconductor IP put it in a good position.
• The purchase of Synopsys’ ARC Processor IP and MIPS allows it to offer more than just fabrication to its clients, meaning that it can address more of the TAM for semiconductors.
• There is also a potential ecosystem effect, where if enough customers avail themselves of the IP blocks and tools on offer, it becomes a standard for certain types of chips, which will bring much more business to GF in the long term.
• The other area that is looking good now is the long-term bet on silicon photonics, which the company has been quietly working on for some time.
• Shuttling data around data centres is increasingly becoming a bottleneck for data centre performance, and using optical rather than electronic communication is an option to increase both speed and capacity.
• This is turning out to be a good bet with 2025 revenues doubling to more than $200m and expectations for another doubling in 2026.
• Geopolitics is another factor that runs in GF’s favour as its factories are all outside of China’s backyard, which makes it a good place to put some business to reduce the risks of China fulfilling its stated intentions of reunifying with Taiwan.
• When I add all of these factors up, it looks to me that the medium outlook for GF is pretty good because, if it can show steady growth, then the shares should enjoy a good run beyond what we have already seen.
• I don’t have a position in GF, but it’s one I have had my eye on for a while and it looks like the efforts made over the last couple of years are beginning to see some results.