Intel jumps 10% as incoming CEO Tan brings 'instant credibility' to turnaround efforts

Reuters

Thu, Mar 13, 2025, 4:35 AM 3 min read

(Reuters) -Shares of Intel surged 10% successful premarket activity, arsenic Wall Street cheered the determination to sanction erstwhile committee subordinate Lip-Bu Tan arsenic CEO, who near successful August implicit differences astir the chipmaker's direction, aft respective years of marketplace underperformance.

Tan volition beryllium tasked with reviving the company's fortunes aft it missed retired connected the artificial intelligence-driven semiconductor roar portion plowing billions of dollars into gathering retired its chip-making business. Intel has posted respective quarters of marketplace stock losses successful information centers and PCs, arsenic good arsenic billion-dollar losses successful its manufacturing business, and implicit the past 5 years, the banal has mislaid astir 60% of its value, a play of clip erstwhile the Nasdaq Composite Index and S&P 500 person some much than doubled.

"Tan successful arsenic CEO astatine Intel was arsenic bully arsenic stakeholders could person hoped for," said TD Cowen analysts, noting that helium has "deep relationships" crossed the spot ecosystem that could gully customers to the company's declaration manufacturing business.

Tan volition instrumentality the helm adjacent week — 3 months aft Intel ousted CEO Pat Gelsinger. Tan had been brought into the committee 2 years earlier to assistance crook the institution around, but near owed to disagreements implicit the size of the company's workforce and its culture. Skepticism astir Intel's aboriginal has deepened successful caller months amid reports that rivals, including Broadcom, were evaluating the spot plan and selling business, portion TSMC has separately studied controlling immoderate oregon each of its plants.

Analysts expect Tan to travel Gelsinger successful keeping the spot plan and manufacturing operations unneurotic — a program that Tan hinted astatine successful a missive to employees by vowing to marque Intel a apical foundry, an manufacture word for a declaration spot manufacturer. Some analysts person said the foundry concern whitethorn find it hard to gully orders from spot designers wary of entrusting accumulation to a rival.

But Tan, who oversaw much than a decennary of beardown maturation astatine Intel supplier and chip-design bundle Cadence Design Systems, enjoys beardown credibility arsenic a "neutral party" that could assistance Intel flooded immoderate of the challenges, analysts said.

Stacy Rasgon of Bernstein besides said Tan's erstwhile two-year tenure connected the Intel committee would assistance his efforts.

That "should person fixed him a beauteous bully thought of wherever each the bodies are buried, and helium should beryllium overmuch realistic successful his evaluations and outlook than anterior enactment (it was unbridled optimism proved to beryllium Pat's undoing)," Rasgon said.