In the dynamic world of technology, the semiconductor industry stands as a cornerstone of innovation and growth. In this analysis, I will compare GLOBALFOUNDRIES Inc. (GFS) and Arm Holdings plc (ARM), two key players in the semiconductor sector. Both companies share market overlap through their focus on integrated circuits and microprocessors, yet they diverge in their innovation strategies and market applications. Join me as we explore which of these companies presents the most compelling investment opportunity.
Table of contents
Company Overview
GLOBALFOUNDRIES Inc. Overview
GLOBALFOUNDRIES Inc. is a leading semiconductor foundry with a robust position in the global market. Founded in 2009 and headquartered in Malta, NY, the company specializes in manufacturing integrated circuits that power a wide array of electronic devices, from microprocessors to power management units. With a market capitalization of approximately $19.8B, GFS focuses on providing advanced wafer fabrication services and technologies. The company employs around 13,000 people and operates with a vision to drive innovation in the semiconductor landscape, catering to diverse sectors including automotive and consumer electronics.
Arm Holdings plc Overview
Arm Holdings plc is a prominent player in the semiconductor industry, renowned for its innovative architecture and licensing of central processing unit (CPU) technologies. Established in 1990 and based in Cambridge, UK, Arm’s products are integral to various markets, including automotive, computing infrastructure, and the Internet of Things (IoT). With a market cap nearing $142.7B, Arm offers a comprehensive portfolio that includes microprocessors, graphics processing units, and systems intellectual property (IPs). As a subsidiary of Kronos II LLC, Arm employs about 8,330 individuals and continues to shape the future of technology through its pioneering designs.
Key similarities and differences
Both GLOBALFOUNDRIES and Arm operate within the semiconductor industry, yet their business models differ significantly. GFS functions primarily as a foundry, manufacturing chips for various clients, while Arm focuses on designing and licensing its CPU architectures to other companies. This distinction highlights GFS’s role in production and Arm’s emphasis on innovation and intellectual property.
Income Statement Comparison
The table below compares the most recent income statements of GLOBALFOUNDRIES Inc. and Arm Holdings plc, providing key financial metrics to evaluate their performance.
| Metric | GLOBALFOUNDRIES Inc. | Arm Holdings plc |
|---|---|---|
| Market Cap | 19.85B | 142.68B |
| Revenue | 6.75B | 4.01B |
| EBITDA | 1.50B | 902.90M |
| EBIT | -64.00M | 720.00M |
| Net Income | -265.00M | 792.00M |
| EPS | -0.48 | 0.75 |
| Fiscal Year | 2024 | 2025 |
Interpretation of Income Statement
In the most recent fiscal year, GLOBALFOUNDRIES faced significant challenges, reporting a decline in revenue to 6.75B, down from 7.39B in the previous year, alongside a net loss of 265M. Meanwhile, Arm Holdings demonstrated strong growth, with revenue rising to 4.01B from 3.23B, and a net income of 792M, reflecting effective cost management and robust demand for its technologies. The competition indicates that while Arm is gaining momentum with improving margins, GLOBALFOUNDRIES is struggling to stabilize its financial performance.
Financial Ratios Comparison
Here is a comparative overview of the financial metrics for GLOBALFOUNDRIES Inc. (GFS) and Arm Holdings plc (ARM) based on the most recent data.
| 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 | 0.14 | 0.04 |
| Interest Coverage | -1.48 | N/A |
| 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 financial ratios reveal significant differences between GFS and ARM. GFS shows negative returns on equity and invested capital, indicating poor profitability and efficiency, while ARM boasts strong profitability metrics, particularly ROE and ROIC. GFS’s high P/E ratio suggests market skepticism regarding future earnings, whereas ARM’s elevated ratios reflect investor confidence. Notably, ARM’s current and quick ratios indicate robust liquidity, contrasting GFS’s weaker position. Investors should be cautious with GFS due to its negative margins and high leverage, whereas ARM appears financially healthier.
Dividend and Shareholder Returns
GLOBALFOUNDRIES Inc. (GFS) does not pay dividends, maintaining a dividend payout ratio of 0%. The absence of dividends aligns with its current reinvestment strategy aimed at growth, reflecting a high capital expenditure coverage ratio of 2.76. Despite no dividends, GFS has engaged in share buybacks, indicating a commitment to returning value to shareholders.
On the other hand, Arm Holdings (ARM) also does not distribute dividends, prioritizing reinvestment in R&D and growth opportunities. With a robust cash position and strategic acquisitions, this approach appears to support long-term shareholder value creation. Overall, the lack of dividends from both companies suggests a focus on sustainable growth rather than immediate returns, which can be beneficial for long-term investors.
Strategic Positioning
GLOBALFOUNDRIES Inc. (GFS) holds a significant market share in the semiconductor foundry sector, focusing on manufacturing a diverse range of integrated circuits. With a market cap of approximately $19.8B, GFS faces competitive pressure from key players like Arm Holdings plc (ARM), which dominates CPU architecture and licensing with a market cap of about $142.7B. Technological disruptions, particularly in AI and IoT, are reshaping the landscape, necessitating innovative strategies for both companies to maintain their competitive edge.
Stock Comparison
Over the past year, we’ve observed significant price movements and trading dynamics for GLOBALFOUNDRIES Inc. (GFS) and Arm Holdings plc (ARM), which are crucial for investors assessing potential opportunities and risks in their portfolios.
Trend Analysis
GLOBALFOUNDRIES Inc. (GFS) has experienced a price change of -36.05% over the past year, indicating a bearish trend. The highest price reached was 59.17, while the lowest was 31.54. Notably, the stock is showing acceleration in its decline, with a standard deviation of 7.38 suggesting considerable volatility.
In the recent period from September 14, 2025, to November 30, 2025, GFS saw a price increase of 13.17%. However, the overall trend remains bearish. The standard deviation during this period was 1.34, indicating lower volatility compared to the overall timeframe.
Arm Holdings plc (ARM), on the other hand, has posted a remarkable price change of +102.18% over the past year, reflecting a bullish trend. The stock reached a high of 181.19 and a low of 67.05. Despite this strong upward movement, the trend is currently showing signs of deceleration, with a standard deviation of 23.44, implying higher volatility.
From September 14, 2025, to November 30, 2025, ARM experienced a decline of 10.01%. This recent downturn, coupled with a negative trend slope of -0.76, suggests caution despite the overall bullish performance. The standard deviation in this recent period was 12.61, indicating notable volatility.
In summary, while ARM presents a robust long-term outlook, the recent trends warrant careful monitoring for potential shifts in momentum. Conversely, GFS’s significant decline underscores the need for vigilant risk management in investment decisions.
Analyst Opinions
Recent analyst recommendations for GLOBALFOUNDRIES Inc. (GFS) indicate a cautious stance, with a rating of C+. Analysts highlight concerns over return on equity and assets, suggesting a hold position. In contrast, Arm Holdings plc (ARM) has garnered a more favorable B- rating, driven by strong return metrics, leading analysts to lean towards a buy consensus for the current year. Overall, the market sentiment suggests a mixed outlook, with ARM favored for investment while GFS may require further evaluation before committing funds.
Stock Grades
In reviewing the latest stock grades for two notable companies, I found reliable ratings from reputable grading companies that can help inform your investment decisions.
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 |
| Benchmark | maintain | Hold | 2025-11-06 |
| Keybanc | maintain | Overweight | 2025-11-06 |
| Needham | maintain | Hold | 2025-11-06 |
| Mizuho | maintain | Outperform | 2025-11-06 |
| Barclays | maintain | Overweight | 2025-11-06 |
| UBS | maintain | Buy | 2025-11-06 |
| TD Cowen | maintain | Buy | 2025-11-06 |
| Rosenblatt | maintain | Buy | 2025-11-06 |
| JP Morgan | maintain | Overweight | 2025-11-06 |
Overall, both companies display a consistent trend of maintaining their current grades, with some mixed signals, particularly for GLOBALFOUNDRIES where a downgrade was noted. Arm Holdings, on the other hand, maintains a strong positive outlook with multiple “Buy” ratings. As always, I recommend analyzing these trends in the context of your overall portfolio strategy and risk tolerance.
Target Prices
The current consensus target prices suggest significant potential for both GLOBALFOUNDRIES Inc. and Arm Holdings plc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| GLOBALFOUNDRIES Inc. (GFS) | 37 | 37 | 37 |
| Arm Holdings plc (ARM) | 210 | 190 | 200 |
For GLOBALFOUNDRIES Inc., the consensus target price of 37 indicates a slight upside potential from its current price of 35.84. In contrast, Arm Holdings plc’s target consensus of 200 suggests a substantial upside from its current price of 135.11, reflecting strong analyst expectations.
Strengths and Weaknesses
The following table summarizes the strengths and weaknesses of GLOBALFOUNDRIES Inc. (GFS) and Arm Holdings plc (ARM).
| Criterion | GLOBALFOUNDRIES (GFS) | Arm Holdings (ARM) |
|---|---|---|
| Diversification | Moderate | High |
| Profitability | Low | High |
| Innovation | Moderate | High |
| Global presence | Moderate | Strong |
| Market Share | Moderate | High |
| Debt level | Low | Very Low |
In summary, ARM shows strong profitability and innovation, along with low debt levels, making it a solid choice for investors. Conversely, GFS has moderate strengths but struggles with profitability, warranting cautious investment consideration.
Risk Analysis
In the table below, I outline the key risks associated with GlobalFoundries Inc. and Arm Holdings plc to help you evaluate these companies for investment.
| Metric | GLOBALFOUNDRIES Inc. | Arm Holdings plc |
|---|---|---|
| Market Risk | High | Moderate |
| Regulatory Risk | Moderate | Low |
| Operational Risk | Moderate | Moderate |
| Environmental Risk | Low | Low |
| Geopolitical Risk | High | Moderate |
Both companies face significant market and geopolitical risks, with GlobalFoundries exposed to fluctuations in semiconductor demand and Arm navigating competitive pressures. Recent supply chain disruptions have highlighted vulnerabilities for both firms.
Which one to choose?
In comparing GLOBALFOUNDRIES Inc. (GFS) and Arm Holdings plc (ARM), I find that both companies exhibit distinct strengths and weaknesses. GFS has experienced a substantial revenue decline with a bearish stock trend, reflected in a recent price change of -36.05%, alongside a net profit margin of -0.04. In contrast, ARM shows a bullish trend with a remarkable price increase of 102.18% and a net profit margin of 0.20, though it carries a higher price-to-earnings ratio of 141.58, indicating potential overvaluation.
For growth-oriented investors, ARM appears to be a more attractive option, while those prioritizing value may lean towards GFS, despite its current struggles. However, investors should remain cautious of potential risks, including market dependence and competition.
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:
