GlobalFoundries (GFS) shares climbed Tuesday after the contract chipmaker reported fiscal first-quarter results that beat Wall Street expectations, with particular strength in data center and automotive markets.

The company posted revenue of $1.634 billion, up 3% from a year ago and slightly above the analyst consensus estimate of $1.627 billion. Adjusted earnings per share came in at 40 cents, topping the 34-cent consensus.

Investors pushed the stock up 6.5% to $72.16, a new 52-week high.

Segment Highlights

The numbers tell a story of shifting demand. Smart mobile device revenue fell 5% year-over-year to $558 million, and home and industrial IoT revenue dropped 22% to $255 million. But those declines were more than offset by growth in higher-margin areas.

Communications infrastructure and data center revenue jumped 32% to $230 million, while automotive revenue rose 24% to $382 million. Technology services revenue grew 11% to $209 million. Wafer shipments increased 7% to 579,000 300mm equivalents.

Margins and Cash Position

Profitability improved nicely. Adjusted gross margin expanded to 29.0% from 23.9% a year ago, and adjusted operating margin rose to 16.6% from 13.4%. The adjusted EBITDA margin slipped slightly to 34.3% from 35.2%.

GlobalFoundries generated $542 million in operating cash flow during the quarter and ended March with $3.8 billion in cash and equivalents.

CEO Tim Breen credited the strong quarter to execution and a better revenue mix. "We delivered a strong first-quarter, with profitability metrics at or above guidance," he said. He highlighted double-digit growth in automotive and communications infrastructure/data center, and pointed to optical networking, silicon photonics, and silicon germanium as key long-term growth drivers.

Partnerships and Customer Momentum

Breen noted that design wins increased 50% year over year, and the company expanded partnerships with Renesas, Bosch, Apple, Inova, SENKO, Corning, EXFO, and Silic Tech. Demand for silicon photonics remains particularly strong. "We are on track to roughly double that revenue in 2026 and reach a revenue run rate above $1 billion exiting 2028," he said.

Outlook

CFO Sam Franklin sees full-year margin expansion supported by a richer mix, cost controls, and higher-value technology services. He said capital spending will remain disciplined, prioritizing areas like silicon photonics, FDX, and high-performance SiGe where customer demand is strong.

For the second quarter, GlobalFoundries expects revenue of $1.735 billion to $1.785 billion, compared to the analyst consensus estimate of $1.743 billion. Adjusted EPS is forecast at 38 to 48 cents, versus the 40-cent consensus.