Intel Soars Nearly 15% Following Investor Approval of New CEO Tan – One America News Network
By Aditya Soni
March 13, 2025 – 8:53 AM PDT
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(Reuters) – Intel’s (INTC.O) shares jumped nearly 15% on Thursday following Wall Street’s positive response to its appointment of former board member Lip-Bu Tan as CEO. Tan, who departed in August due to differing views on the company’s strategic direction, is stepping in after a prolonged period of lackluster market performance.
Tan faces the challenge of revitalizing the company’s prospects after it failed to capitalize on the surge in demand for artificial intelligence-driven semiconductors, despite investing billions to enhance its chip manufacturing capabilities. The company has reported multiple quarters of declining market share in both data centers and PCs, along with significant losses in its manufacturing sector. Over the past five years, Intel’s stock has plummeted by around 60%, during a period when the Nasdaq Composite Index and S&P 500 have both more than doubled.
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“Tan’s return as CEO at Intel is likely the best outcome stakeholders could have anticipated,” commented analysts from TD Cowen, emphasizing Tan’s “deep connections” within the chip industry that may attract customers to the company’s contract manufacturing services.
Tan will officially take over next week, just three months after Intel dismissed CEO Pat Gelsinger. Tan initially joined the board two years prior to help revitalize the company but resigned due to disagreements regarding workforce size and corporate culture. Concerns regarding Intel’s future have intensified in recent months, with reports indicating that competitors like Broadcom (AVGO.O) are assessing their chip design and marketing business, and TSMC (2330.TW) is exploring control over some or all of its plants.
Analysts believe Tan will likely follow Gelsinger’s integrated approach of maintaining the chip design and manufacturing sectors together. In a letter to employees, he indicated a commitment to positioning Intel as a leading foundry, a term used for contract chip makers. However, some analysts express skepticism that the foundry sector will attract orders from chip designers hesitant to rely on a competitor for production.
Nevertheless, Tan’s previous leadership at Cadence Design Systems (CDNS.O), a key supplier to Intel, gives him substantial credibility as a “neutral party” who could navigate through these hurdles, according to analysts.
Stacy Rasgon from Bernstein noted that Tan’s prior two-year experience on Intel’s board should facilitate his efforts, asserting that this experience will provide him with insights into the company’s internal challenges, enabling him to adopt a more pragmatic and realistic outlook compared to previous leadership, which was criticized for overly optimistic projections.
Despite the optimistic outlook, a successful turnaround is anticipated to take several years, a sentiment echoed by Tan in his initial message to employees.
Intel’s market capitalization has remained below $100 billion for the first time in three decades following a 60% decline in share prices last year, coupled with missed sales targets for its Gaudi AI chips.
A greater number of analysts are advising investors to “sell” the stock rather than “buy,” with many rating it as a “hold,” according to LSEG data.
Rasgon remarked that Tan “has a significant challenge ahead and much work to do, though it seems increasingly necessary for something tangible to be presented to investors (and if he fails, it might have been a fundamental issue).”
Reporting by Aditya Soni in Bengaluru; Editing by Sriraj Kalluvila
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