INTC stock price surges over 15%: Could new Intel CEO Lip-Bu Tan could turn the struggling chipmaker’s fortunes?

[ResidentialBusiness]

Shares of Intel Corporation (NASDAQ:INTC) surged over 15% on Thursday as Wall Street welcomed the chipmaker’s appointment on Wednesday of new CEO Lip-Bu Tan, just three months after the company ousted former CEO Pat Gelsinger.

A widely respected executive with more than 20 years of experience in the semiconductor space, Tan will have a lot on his plate when he takes the helm as Intel’s CEO on March 18. The ailing chipmaker has been struggling to turn around its business after missing out on the generative artificial intelligence boom and losing market share to fierce competition from Nvidia and AMD.

Over the last several quarters, Intel has lost market share in data centers and PCs, and lost billions in its manufacturing business. The company’s stock dropped 59.60% of its value last year.

On his appointment, Tan said, “I see significant opportunities to remake our business in ways that serve our customers better and create value for our shareholders.”

Tan succeeds interim co-CEOs David Zinsner and Michelle (MJ) Johnston Holthaus, who were put in place after former CEO Pat Gelsinger was forced out last December by the board, who felt his plan to turn around the company wasn’t working fast enough.

Tan is not a newcomer to the Intel ecosystem. During his decade as CEO of Intel supplier and chip-design software company Cadence Design Systems, he doubled revenue, expanded operating margins, and delivered a stock price appreciation of more than 3,200%.

Tan’s appointment comes amid ongoing reports that rivals Broadcom (AVGO) and Taiwan Semiconductor Manufacturing Co. (TSMC) are in talks to divide the ailing chipmaker’s business into two parts, according to the Wall Street Journal. Broadcom is interested in Intel’s chip-design and marketing business, while TSMC has signaled interest in investing in and studying Intel’s chip plants, potentially as one of several investors with talk of a consortium of chip companies coming in on the deal, including Nvidia (NVDA).

However, Tan has signaled he’ll carry on with an existing plan and won’t split out the company’s design and foundry businesses.

“We will work hard to restore Intel’s position as a world-class products company, establish ourselves as a world-class foundry and delight our customers like never before,” Tan told employees in a letter that was later published on Intel’s website. “That’s what this moment demands of us as we remake Intel for the future.”

View the full article