Intel Corp (NASDAQ INTC) surged by nearly 15% after-hours on Wednesday, after the company named Lip-Bu Tan as its new CEO.
Tan previously held a similar position at Cadence Design Systems Inc. (NASDAQ: CDNS), a multinational company located in San Jose, California that produces software for chip designers including Intel.
Tan will assume the role of Intel’s interim CEOs, David Zinsner & MJ Holthaus on March 18th.
He will also return to the board, having previously stepped down in August 2024.
Lip-Bu Tan is likely to have a tough road ahead
Lip-Bu Tan has been tasked with steering Intel during a critical transformation.
His primary focus will be on rebuilding the process technology roadmap of the company in pursuit to regain leadership in semiconductor manufacturing.
Tan will also focus on improving execution, driving innovation and strengthening Intel’s foundry business in order to regain its competitive position in the global marketplace.
The new CEO is expected to use his vast experience from the semiconductor industry to help Intel accelerate its turnaround, regain investor confidence, increase shareholder value, and position it for long-term success.
Note that INTC has fallen more than 50% from its 52-week peak.
Why has Intel struggled over the last few years?
Intel has struggled in the fast-growing AI industry, losing market share to Nvidia and Advanced Micro Devices.
The multinational chip manufacturer, however, exceeded street expectations in the most recent quarter.
INTC, however, cited intense competition, macroeconomic conditions and seasonal factors in its cautious outlook for the first three months.
Intel warned in January of the added uncertainty that could result from the possibility of new tariffs in the Trump administration.
Since then, President Trump has turned this “possibility”, into a “reality”.
Intel shares are currently paying a healthy dividend yield (2.42%) which makes them more attractive in 2025.
Is it worthwhile to invest in Intel stock now?
Citi’s “neutral” stance towards Intel stock was reiterated just days before Intel announced its new CEO.
Analyst Christopher Danely is worried that “there could possibly be an inventory build-up in CPUs, given that CPUs grew in the low double digits during H2 2024, while PCs grew in the mid-single figures.”
Citi now expects PCs to grow at a rate of 4.0% year-over-year in 2025. The $21 price target set by the investment firm on INTC warns that there could be a 10% drop in value from here.
It is still unclear whether Citi will change its opinion on Intel shares following the appointment Lip-Bu Tan to its new CEO.
The consensus rating for the semiconductor stock is currently “hold”.
This post Intel stock soars after chipmaker namess new chief executive could be modified as new developments unfold.
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