NEW YORK, December 31, 2025, 14:25 ET — Regular session
Shares of GlobalFoundries Inc (GFS) fell 2.6% to $35.17 by 2:25 p.m. ET on Wednesday after Wedbush downgraded the contract chipmaker, pressuring the stock on the year’s final trading day. The shares touched $35.03 at the session low.
The downgrade lands as investors try to pin down when demand will rebound across consumer electronics, industrial gear and autos — end markets that drive factory loadings for chipmakers.
For GlobalFoundries, the timing matters because its business depends on keeping fabs busy; when customers cut orders, lower utilization means more fixed costs per chip and less room for margin expansion.
Wedbush cut GlobalFoundries to Neutral from Outperform and reduced its 12-month price target to $40 from $42. Analyst Matt Bryson wrote that “our recent checks in Taiwan suggested that industrial/auto demand remains relatively weak with no anticipation of any near-term recovery,” adding that margins should stay near historical highs this quarter despite suboptimal utilization. Investing.com
The broker also flagged near-term risk to consumer electronics and handset demand as rising memory prices lift device costs, leading original equipment manufacturers — the companies that build phones and PCs — to curb production. Wedbush said roughly half of GlobalFoundries’ revenue is tied to smart mobile devices and home and industrial internet-of-things chips, or connected sensors and gadgets.
GlobalFoundries, which operates chip plants in the United States, Germany and Singapore, focuses on contract manufacturing, or foundry work, for other chip designers. It forecast fourth-quarter revenue of about $1.80 billion and adjusted earnings of 47 cents a share, plus or minus 5 cents, at its last results update in November.
Policy is another swing factor. The U.S. Trade Representative said in a Federal Register notice that a new Section 301 action would set an initial 0% tariff level on Chinese semiconductors now, with an increase scheduled for June 23, 2027 — a long runway that Wedbush cited as pushing out policy-driven tailwinds. Section 301 is a U.S. trade law that allows tariffs in response to unfair trade practices.
The stock’s drop outpaced the broader semiconductor group. The iShares Semiconductor ETF was down about 0.3% and the VanEck Semiconductor ETF was little changed around the same time, based on market data.
At $35.17, Wedbush’s $40 target implies about 14% upside, but the downgrade signals the broker wants clearer evidence that demand and utilization are turning.
Traders and investors will be watching upcoming updates on handset builds, memory pricing and industrial and automotive orders, which Wedbush highlighted as the pressure points. GlobalFoundries’ next quarterly report is the next major checkpoint for commentary on factory utilization and margins.
