Heat a large heavy-bottomed pot over medium heat, add half of the butter and allow to melt. Add the shallots and garlic and sauté until the shallots are tender and opaque, about 3 minutes.
Add half of the mushrooms and sauté until half the size and golden brown, about 6 minutes. Remove mixture to a bowl and set aside then add the remaining butter and repeat with the remaining mushrooms.
Add all the mushrooms back to the pot then stir in the granulated garlic, thyme, salt and pepper. Deglaze the pan with the red wine, scraping any bits off the bottom with a wooden spoon.
Add the vegetable stock, and bring the mixture to a boil. Reduce the heat to medium-low and simmer until slightly reduced, about 30 minutes.
Remove from heat and let cool for 10 minutes. Once the mixture is cool add to a blender and purée.
Add the mushroom mixture back to the pot and return to a simmer over medium heat. Add the heavy cream, whisking to combine. Slowly add the cheese, whisking constantly, until it has completely melted. Stir in the sherry and remove from heat.
To serve, ladle the soup into warmed soup bowls and serve hot with grilled baguettes.