GlobalFoundries surges on strong Q3, outlook; other chip names follow
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GlobalFoundries (NASDAQ:GFS) surged more than 10% in early trading on Tuesday after the semiconductor foundry giant posted third-quarter results that topped estimates and issued a forecast that surpassed expectations, spurring a rally in other semiconductor names.
For the third-quarter, the Thomas Caulfield-led GlobalFoundries (GFS) earned an adjusted 67 cents per share on $2.1B in revenue, up 22% year-over-year. Analysts were expecting adjusted earnings of 62 cents per share on $2.05B in revenue. 
The company also reported record gross margin of 29.4% and adjusted gross margin of 29.9%, while also setting a new record for operating margin at 17.2%. Adjusted operating margins came in at 18.8%.
Adjusted EBITDA for the quarter was $793M.
In a statement, Dr. Caulfield said the company was able to continue to execute "despite ongoing macroeconomic and geopolitical challenges."
"Our revenue grew 22% year-over-year, and we delivered record gross, operating, and net profits, making significant progress towards our long-term financial model," Caulfield added. "We remain on track to deliver a strong year of growth and profitability.â
Looking to the fourth-quarter, GlobalFoundries (GFS) said it expects net revenue to be between $2.05B and $2.1B, with adjusted earnings per share between $1.24 and $1.44, compared to estimates of $1 per share.
The surge in GlobalFoundries (GFS) spurred a rally in other semiconductor companies, including competitor Taiwan Semiconductor (TSM), which rose more than 2.5% in early trading.
Advanced Micro Devices (AMD), Intel (INTC), Qualcomm (QCOM), Texas Instruments (TXN) and Broadcom (AVGO) all gained more than 1% on Tuesday.
Nvidia (NASDAQ:NVDA) tacked on more than 3% after it announced a new chip that can be exported to China despite controls from the Biden Administration.
Last month, GlobalFoundries (GFS) received $30M in federal funding to advance the development and production of next-generation gallium nitride chips at its facility in Vermont.