AI Optical Demand 'Skyrocketing' but $4B 2027 Capex Sends Shares Down 8%
GFS sits 27% above its 52-week low of $32.02.
Summary
Q3 revenue of $1.899 billion (+13% year over year) beat the $1.889 billion consensus and adjusted EPS of $0.53 topped the $0.50 estimate, but the stock fell 8% as management guided to about $4 billion of net capital spending in 2027, only roughly one-third covered by customer prepayments. The IFRS net loss of $270 million was driven by a $441 million noncash charge on shares issued to the U.S. government, not operations. The real story is silicon photonics: data center and communications revenue jumped 81% to $316 million, CEO Tim Breen said optical demand is 'truly skyrocketing,' and capacity is booked through 2027 with commitments building into 2028 and inquiries into 2029. Management pulled forward its $1 billion annualized silicon photonics run-rate target to end-2027 and plans to roughly triple that capacity next year. Q4 guidance of $1.975-$2.025 billion revenue and $0.54-$0.64 adjusted EPS brackets the $2.002 billion and $0.56 consensus, so the selloff is about funding the 2027 build, not demand.
At the time of this announcement, GFS was trading at $40.82 on NASDAQ in the Technology sector, with a market capitalization of approximately $22.4B. The 52-week trading range was $32.02 to $92.55. This news item was assessed with neutral market sentiment and an importance score of 7 out of 10. Source: Benzinga.