GlobalFoundries (GFS) Stock Forecast & Price Target

GLOBALFOUNDRIES is attractive because its core business is now showing clearer operating leverage, with revenue of $1.63B slightly above guidance and non-IFRS gross margin of 29.0% coming in 200bps ahead of guidance, while 2Q26 revenue is guided higher to $1.76B with margins holding near the 28.5% level. The bull case is strengthened by a favorable mix shift and capacity allocation toward higher-ASP, higher-margin specialties such as SiGe and SiPho, alongside tightening 12nm and above capacity that can support incremental pricing power and a path toward roughly 30% non-GAAP gross margin. Growth visibility is improving as Communication Infrastructure and Data Center is expected to rise in the high-30% range in CY26, with SiPho already near a ~$200M CY25 revenue run-rate expected to double in CY26 and SatCOM and Automotive adding durable long-cycle demand that broadens the company’s secular growth profile beyond smartphones.

GLOBALFOUNDRIES is likely to face sustained fundamental pressure because significant capacity additions at similar mature process nodes can intensify pricing competition and increase the risk of customer losses, while broader competition from other nations and China adds to overall chip supply. Its execution history has also lagged prior targets set in 2022, with performance weighed by tougher comparisons to elevated COVID-related revenues in CY21/22 and by the loss of AMD and MRVL sockets in the data center, highlighting weaker-than-expected operating momentum. Although Automotive has expanded from about 4% of revenues in CY21 to 21% in CY25 and Smart Mobile Devices still represents roughly 44% of revenues from CY21-CY25, the mix remains exposed to a sub-40% Smart Mobile segment that is expected to keep drifting lower amid likely smartphone unit declines in CY26 and CY27, which limits near-term growth and supports a negative outlook.