GlobalFoundries: AI Infrastructure Is Creating A Better Business

GlobalFoundries is expanding into higher-value semiconductor technologies, including silicon photonics, AI infrastructure, and automotive applications. Communications Infrastructure and Data Center revenue grew 32%, while Automotive revenue increased 24%, improving the company's revenue mix. Management expects silicon photonics to become a $2 billion revenue opportunity by 2030 while expanding higher-margin Technology Services.

GFS trades below the peer median on a forward EV to EBITDA basis despite improving margins, cash flow, and shareholder returns. I assign a buy rating with an $88 price target, representing approximately 26% upside from current levels.

I assign GlobalFoundries Inc. ( GFS ) a buy rating because I believe that the market is underestimating the company's long-term potential as they shift toward higher-value semiconductor technology. While the company's near-term...