We recently compiled a list of the 15 Semiconductor Stocks Making Impressive Comeback From DeepSeek AI Dip. In this article, we are going to take a look at where GLOBALFOUNDRIES Inc. (NASDAQ:GFS) stands against the other semiconductor stocks.
The semiconductor industry has always been a battleground for technological development, though lately, it has turned into a full-scale battle. The US and China are not only vying to outpace each other in the race to achieve AI superiority but are also actively trying to slow each other down.
The US for instance has placed a number of export restrictions on global firms selling semiconductor technologies to China. Many leading US companies have had to deal with declining China sales as a result of these restrictions. On the other hand, China is trying its best to come up with technologies that compete with those in the US, despite restrictions.
The emergence of DeepSeek AI at the end of January was a wake-up call for the Americans, with China building its latest AI model for a fraction of the cost that the US counterparts spend on their models. While the validity of these claims is debatable, it does show how far China has come when it comes to competing with the US.
As a result of the DeepSeek AI announcement, many semiconductor stocks took a big hit. Two weeks later, some of the stocks started recovering and investors started feeling comfortable with the thought of continued technological dominance by the US. We therefore decided to look at the semi-stocks that were making a comeback from the DeepSeek dip.
To come up with the list of 15 semiconductor stocks making a comeback from DeepSeek AI dip, we only considered stocks with a market cap of at least $10 billion that beat the S&P 500 in the last 5 days of trading.
A technician holding a complex printed circuit board with microcontrollers, showing the company’s expertise in powering devices.
GLOBALFOUNDRIES Inc. (NASDAQ:GFS)
GLOBALFOUNDRIES Inc. (NASDAQ:GFS) operates as a semiconductor foundry that offers a variety of mainstream wafer fabrication services & technologies. The company develops different devices such as mobile application processors, network processors, microcontrollers, baseband processors, and other devices. The stock is up 11.27% in the last week against the S&P 500’s 1.13% gains.
The stock is gaining on analyst optimism as Needham upgraded the stock from Hold to Buy last week, assigning a price target of $50, a 16% upside from here on. Needham analysts believe the cyclical downturn is about to end for the semiconductor industry and a return to YoY growth is on the horizon:
Not only do we forecast a return to Y/Y growth in 2025 but also we see meaningful gross margin expansion through the year. We also believe GFS may benefit from increasing geopolitical tensions between the U.S. and China as customers onshore semiconductor manufacturing.
The bullish thesis backed by geopolitical tensions is likely to drive the stock prices higher as America focuses on Project Stargate and other ventures to keep China at bay in AI. It is also well-supported by the strong data center and automotive markets in 2025.
Overall GFS ranks 2nd on our list of the semiconductor stocks that are making impressive comeback from DeepSeek AI Dip. While we acknowledge the potential of GFS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as GFS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
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