CA - GlobalFoundries: Same Headwinds Different Quarter - Hold Rating

2024-06-20 23:20:48 ET

Summary

• GlobalFoundries reported their 1Q24 with better than expected net income, but the headwind from the industry slowdown continues to show up.
• GlobalFoundries reported lower smart mobile device revenue, with inventory levels increasing and weak end-demand environment.
• In my opinion, GlobalFoundries' heavy exposure to smartphones continues to underperform peer group, with little upside in the near-term.
• I share my thoughts on GlobalFoundries here, and why I think it has limited upside in 2024.

Investment Thesis

I last wrote on GlobalFoundries Inc. ( GFS ) with a neutral rating ahead of their first quarter of FY2024 earning results and outlook for the full fiscal year; I’m writing to reaffirm my less optimistic outlook on the stock after 1Q24 earning results confirmed my concern about lumpy smart mobile device-related sales weighing on the company’s financial performance....

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