Why Is GlobalFoundries (GFS) Stock Up Nearly 10% Today?

Core Viewpoint - GlobalFoundries (NASDAQ:GFS) experienced a significant stock increase of approximately 10% due to comments from former President Donald Trump, suggesting that a shift towards isolationist policies may enhance domestic chip production and benefit GFS stock [1][5]. Company Overview - GlobalFoundries, based in Malta, New York, manufactures a variety of semiconductor devices, including microprocessors and power management units. A potential shift in U.S. semiconductor policy aimed at supporting domestic businesses could lead to increased market share for GFS [2]. Geopolitical Context - Trump's remarks indicated that Taiwan has taken a substantial portion of the U.S. chip business, which has geopolitical implications, especially concerning U.S.-China relations over Taiwan [3]. Taiwan is noted to produce over 90% of advanced chips, highlighting its critical role in the semiconductor supply chain [4]. Domestic Policy Impact - The disruptions during the Covid-19 pandemic have intensified the focus on diversifying global semiconductor supply chains. A conservative administration prioritizing domestic chip production could positively impact GFS stock [5]. The Biden administration has also initiated programs to support the U.S. semiconductor industry, with GlobalFoundries receiving awards under the Chips Act [6]. Financial Performance - GFS stock has shown lackluster performance over the past five years, with a total gain of about 20%. Analysts project a revenue decline for the current fiscal year, estimating it to reach $6.72 billion, which represents a 9.1% decrease from the previous year's revenue of $7.39 billion [7]. Even the optimistic revenue estimate of $7.17 billion falls short of expectations [8].