In the rapidly evolving semiconductor industry, two key players stand out: GLOBALFOUNDRIES Inc. (GFS) and Arm Holdings plc (ARM). Both companies are instrumental in shaping the future of technology through their innovative approaches to manufacturing and design. While GFS focuses on semiconductor foundry services, ARM specializes in CPU architecture and licensing, creating a fascinating juxtaposition. In this article, I will analyze these companies to help you, the investor, determine which one holds the most promise for your portfolio.
Table of contents
Company Overview
GLOBALFOUNDRIES Inc. Overview
GLOBALFOUNDRIES Inc. is a leading semiconductor foundry that plays a crucial role in the global technology landscape. Established in 2009 and headquartered in Malta, New York, the company specializes in manufacturing integrated circuits for a wide array of electronic devices. With a market capitalization of approximately $18.8B, GLOBALFOUNDRIES is positioned to meet the growing demand for semiconductor solutions across various sectors, including communications, computing, and automotive. The firm prides itself on its advanced wafer fabrication technologies and a comprehensive portfolio of semiconductor devices, which include microprocessors and power management units.
Arm Holdings plc Overview
Arm Holdings plc, founded in 1990 and headquartered in Cambridge, UK, is a prominent player in the semiconductor industry, boasting a market capitalization of around $138.9B. The company is renowned for its architecture and licensing of central processing unit (CPU) products and related technologies, which are essential for semiconductor manufacturers and original equipment manufacturers (OEMs). Arm’s innovative solutions cater to diverse markets, ranging from automotive to consumer technologies and the Internet of Things (IoT). As a subsidiary of Kronos II LLC, Arm continues to lead in providing cutting-edge microprocessors and systems intellectual property.
Key Similarities and Differences
Both GLOBALFOUNDRIES and Arm operate within the semiconductor industry, though their business models diverge significantly. GLOBALFOUNDRIES focuses on manufacturing semiconductor devices as a foundry service, while Arm specializes in designing and licensing CPU architectures and related technologies. This fundamental difference highlights their distinct roles in the semiconductor supply chain.
Income Statement Comparison
Below is a comparative income statement for GLOBALFOUNDRIES Inc. (GFS) and Arm Holdings plc (ARM) for their most recent fiscal years, providing an overview of their financial performance.
| Metric | [Company A: GFS] | [Company B: ARM] |
|---|---|---|
| Revenue | 6.75B | 4.01B |
| EBITDA | 1.50B | 902M |
| EBIT | -64M | 720M |
| Net Income | -265M | 792M |
| EPS | -0.48 | 0.75 |
Interpretation of Income Statement
In the most recent fiscal year, GLOBALFOUNDRIES (GFS) experienced a decline in revenue to 6.75B, down from 7.39B the previous year, reflecting challenges in the semiconductor market. The net income turned negative at -265M, contrasting sharply with Arm Holdings’ solid performance, which reported a net income of 792M, up significantly from 306M in the prior year. ARM showed strong growth and improved margins, indicated by an EBIT of 720M. This stark difference highlights ARM’s resilience and effective cost management, while GFS must address its operational challenges to regain profitability.
Financial Ratios Comparison
The following table presents a comparative analysis of the most recent financial ratios for GLOBALFOUNDRIES Inc. (GFS) and Arm Holdings plc (ARM), providing insights into their financial health and operational efficiency.
| Metric | GFS | ARM |
|---|---|---|
| ROE | -2.46% | 11.58% |
| ROIC | -2.26% | 11.31% |
| P/E | -89.54 | 141.58 |
| P/B | 2.20 | 16.40 |
| Current Ratio | 2.11 | 5.20 |
| Quick Ratio | 1.57 | 5.20 |
| D/E | 0.22 | 0.05 |
| Debt-to-Assets | 13.81% | 3.99% |
| Interest Coverage | -1.48 | 0 |
| Asset Turnover | 0.40 | 0.45 |
| Fixed Asset Turnover | 0.82 | 5.61 |
| Payout Ratio | 0% | 0% |
| Dividend Yield | 0% | 0% |
Interpretation of Financial Ratios
The analysis indicates that GFS struggles with negative return metrics (ROE and ROIC) and a high P/E ratio, suggesting substantial market skepticism about its profitability potential. In contrast, ARM exhibits strong profitability with solid returns and a healthy current ratio, reflecting effective liquidity management. However, ARM’s high P/B and P/E ratios imply it may be overvalued relative to its earnings. Investors should weigh these factors carefully against their risk tolerance and investment goals.
Dividend and Shareholder Returns
GLOBALFOUNDRIES Inc. (GFS) does not pay dividends, reflecting its focus on reinvestment during a growth phase. With a net loss in recent years and a dividend payout ratio of 0, GFS prioritizes capital expenditures to enhance operational capabilities. Notably, the company engages in share buybacks to return value to shareholders, although risks of unsustainable practices remain.
Conversely, Arm Holdings plc (ARM) also refrains from paying dividends, opting instead for reinvestment in R&D and acquisitions, which aligns with its high-growth strategy. ARM’s significant cash flow allows for share repurchases, supporting shareholder value creation. Overall, both companies’ approaches reflect a commitment to long-term growth over immediate returns.
Strategic Positioning
In the semiconductor market, GLOBALFOUNDRIES Inc. (GFS) holds a competitive position with a market cap of $18.82B, focusing on foundry services and a wide array of integrated circuits. However, it faces competitive pressure from Arm Holdings (ARM), which dominates the CPU licensing sector with a market cap of $138.94B. Both companies are adapting to technological disruptions, with GFS emphasizing wafer fabrication while ARM innovates in microprocessing and IoT technologies. The intense competition necessitates strategic differentiation and innovation to maintain market share.
Stock Comparison
In this section, I will analyze the weekly stock price movements of GLOBALFOUNDRIES Inc. (GFS) and Arm Holdings plc (ARM) over the past year, focusing on key price changes and trading dynamics that could influence investment decisions.
Trend Analysis
GLOBALFOUNDRIES Inc. (GFS) Over the past year, GFS has experienced a price change of -43.91%, indicating a bearish trend. The stock price reached a high of 60.6 and a low of 31.54, with a standard deviation of 7.56, suggesting notable volatility. The trend shows signs of acceleration, which could indicate a continued downward movement. Recently, the stock experienced a slight uptick of 2.1% from September 7, 2025, to November 23, 2025, with a low standard deviation of 1.28, indicating reduced volatility in this period.
Arm Holdings plc (ARM) In contrast, ARM has demonstrated a robust performance with a price change of +75.08% over the past year, reflecting a bullish trend. The stock reached a high of 181.19 and a low of 67.05, with a standard deviation of 24.15, pointing to significant volatility. The trend is also characterized by acceleration, suggesting a strong momentum. However, in the recent period from September 7, 2025, to November 23, 2025, ARM’s stock saw a decrease of 4.78%, coupled with a standard deviation of 12.37, indicating some fluctuation in this timeframe.
In summary, while GFS is trending downward with significant risks, ARM has shown strong growth, though it is currently experiencing a slight pullback. This analysis should aid in making informed investment decisions.
Analyst Opinions
Recent recommendations indicate a cautious approach towards GLOBALFOUNDRIES (GFS) and a more favorable outlook for Arm Holdings (ARM). Analysts rate GFS with a C+, highlighting concerns in return on equity and assets, suggesting a hold strategy. In contrast, ARM received a B- rating, with stronger performance metrics, resulting in a consensus to buy. Analysts like those at Fidelity and Goldman Sachs emphasize ARM’s solid fundamentals and growth potential, while recommending caution on GFS due to its weaker financial indicators. Overall, the consensus for ARM is a buy, while GFS leans towards a hold.
Stock Grades
In this section, I present the latest stock ratings for GLOBALFOUNDRIES Inc. and Arm Holdings plc, sourced from reputable grading companies.
GLOBALFOUNDRIES Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wedbush | maintain | Outperform | 2025-11-13 |
| JP Morgan | maintain | Neutral | 2025-11-13 |
| Citigroup | maintain | Neutral | 2025-11-13 |
| Evercore ISI Group | maintain | Outperform | 2025-11-13 |
| B of A Securities | downgrade | Underperform | 2025-10-13 |
| UBS | maintain | Neutral | 2025-08-06 |
| Wedbush | maintain | Outperform | 2025-08-06 |
| Morgan Stanley | maintain | Equal Weight | 2025-08-06 |
| UBS | maintain | Neutral | 2025-07-28 |
| Citigroup | maintain | Neutral | 2025-07-07 |
Arm Holdings plc American Depositary Shares Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Loop Capital | maintain | Buy | 2025-11-12 |
| Needham | maintain | Hold | 2025-11-06 |
| Wells Fargo | maintain | Overweight | 2025-11-06 |
| Keybanc | maintain | Overweight | 2025-11-06 |
| Benchmark | maintain | Hold | 2025-11-06 |
| UBS | maintain | Buy | 2025-11-06 |
| Mizuho | maintain | Outperform | 2025-11-06 |
| Barclays | maintain | Overweight | 2025-11-06 |
| TD Cowen | maintain | Buy | 2025-11-06 |
| Rosenblatt | maintain | Buy | 2025-11-06 |
Overall, both companies maintain a relatively stable rating position, with GLOBALFOUNDRIES showing a mix of outperform and neutral grades, while Arm Holdings enjoys a strong buy sentiment from multiple analysts. This suggests a generally positive outlook for both stocks.
Target Prices
The consensus target prices for GLOBALFOUNDRIES Inc. and Arm Holdings indicate positive expectations from analysts.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| GLOBALFOUNDRIES Inc. (GFS) | 37 | 37 | 37 |
| Arm Holdings plc (ARM) | 210 | 190 | 200 |
For GLOBALFOUNDRIES, the target consensus suggests a potential upside from the current price of $33.99. In contrast, Arm Holdings has a target consensus of $200, indicating a significant upside from its current price of $131.57.
Strengths and Weaknesses
The following table outlines the strengths and weaknesses of GLOBALFOUNDRIES Inc. (GFS) and Arm Holdings plc (ARM) based on their recent performance metrics.
| Criterion | GLOBALFOUNDRIES Inc. (GFS) | Arm Holdings plc (ARM) |
|---|---|---|
| Diversification | Moderate | High |
| Profitability | Low (Net Margin: 14%) | High (Net Margin: 20%) |
| Innovation | Strong | Very Strong |
| Global presence | Good | Excellent |
| Market Share | Moderate | High |
| Debt level | Low (Debt/Equity: 0.25) | Very Low (Debt/Equity: 0.05) |
Key takeaways indicate that while ARM excels in profitability and innovation, GLOBALFOUNDRIES has room for improvement. Investors should weigh ARM’s strong market position against GFS’s potential growth opportunities.
Risk Analysis
In the table below, I outline the key risks associated with GLOBALFOUNDRIES Inc. (GFS) and Arm Holdings plc (ARM) to provide you with a clearer understanding of their potential vulnerabilities.
| Metric | GLOBALFOUNDRIES Inc. | Arm Holdings plc |
|---|---|---|
| Market Risk | High | High |
| Regulatory Risk | Moderate | Moderate |
| Operational Risk | High | Moderate |
| Environmental Risk | Low | Low |
| Geopolitical Risk | Moderate | High |
Both companies face significant market and operational risks due to the volatile semiconductor industry. Recent supply chain disruptions and geopolitical tensions, particularly involving Taiwan and China, could severely impact their operations and market positions.
Which one to choose?
In comparing GLOBALFOUNDRIES Inc. (GFS) and Arm Holdings plc (ARM), several factors stand out. GFS has shown a bearish stock trend with a significant price decline of 43.91% over the past year, while ARM has experienced a bullish trend with an impressive 75.08% price increase. In terms of financial health, ARM exhibits robust gross and net profit margins of 94.86% and 19.77%, respectively, compared to GFS’s struggling margins, which have recently turned negative.
Analyst ratings reflect these trends, with GFS receiving a “C+” rating and ARM a “B-.” ARM’s current ratio of 5.20 suggests strong liquidity, while GFS’s is also healthy at 2.11. For growth-focused investors, ARM appears favorable, while those prioritizing value may consider GFS if looking for potential recovery.
However, both companies face risks from competition and market dependence, which could impact their future performance.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of GLOBALFOUNDRIES Inc. and Arm Holdings plc American Depositary Shares to enhance your investment decisions:
