GlobalFoundries: Replacing Concern With Confidence, For Now - Upgrading To Hold
- GlobalFoundries reported Q3 FY24 results and outlook earlier this week, leading us to believe there's a U-turn underway for the stock.
- GlobalFoundries' Q4 guidance surpasses consensus, boosting investor confidence and driving a 27% stock increase in two days.
- Having said that, GFS's outperformance will remain closely linked to the Smart Mobile Devices segment, which should see recovery next year but remains lackluster for 2024.
- GFS benefits from U.S. foundry status and CHIPS Act funding, with potential further support under the Trump administration in 2025.
- We now think GFS is better positioned to outperform but don't expect to see a material sustained level of outperformance in the near term.
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We're upgrading the stock to hold after a long, bearish stance post-3QFY24 results and outlook. Our sell rating on GlobalFoundries Inc. (NASDAQ:GFS) played out well, with the stock underperforming the S&P 500 (
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