Shares of specialty semiconductor manufacturer GlobalFoundries (GFS -9.34%) sank on Tuesday, down 10.3% as of 3:20 p.m. ET.
The company reported earnings this morning that beat expectations by a decent margin; however, demand may have been "pulled in" to the second quarter, as third-quarter guidance came in well below analysts' expectations.
Mixed performance across different specialty chip end markets
GlobalFoundries is a U.S.-based fab for "specialty" semiconductor manufacturing nodes. These are chips that aren't on the "leading-edge" but are important to several end markets across consumer electronics, autos, Internet of Things (IoT) devices, and a small segment in the periphery of data centers.
In the second quarter, GlobalFoundries posted revenue growth of 3.4% to $1.69 billion, with non-GAAP (adjusted) earnings per share (EPS) of $0.42, up 11% on the year. Both figures beat analyst expectations.
Yet while the overall quarter was good, there were a lot of mixed results underneath the surface. GlobalFoundries saw strong growth in autos and data center, along with decent growth in IoT devices; however, the company's largest segment in consumer electronics continues to struggle, and was down 10%.
And it doesn't appear the consumer segment is improving in the near term, as GlobalFoundries issued highly disappointing guidance for Q3 revenue at $1.68 billion and adjusted EPS of $0.42. That guidance marks a small quarterly decline on both metrics, and was well below analyst consensus.
CEO Tim Breen noted, "As we await a return to meaningful growth across the consumer-driven end markets, I am pleased with the steps GF is taking to broaden the long term value proposition to our customers."

Image source: Getty Images.
GlobalFoundries isn't the most exciting chip stock, but it's getting cheap
As a U.S.-based fabrication company for specialty nodes, GlobalFoundries is more of a "geopolitical risk" play than a real strong AI semiconductor play. So, its biggest value is sort of as a hedge against potential war or disruption in the East Asia supply chain.
That being said, the stock is also getting fairly cheap as it sits at all-time lows. Shares now trade around 20 times this year's earnings expectations and just 14.5 times 2026 EPS expectations.