Intel stock (INTC) will enter the penalty box in 2025, but it is unclear when it will return to the link.
Intel stock has fallen 60% since the beginning of the year, lagging far behind the 29% rise in the Nasdaq Composite Index (^IXIC). Meanwhile, shares of rival chip player Nvidia (NVDA) have soared 173% this year as the company has a significant lead in artificial intelligence chip innovation compared to Intel and AMD (AMD). AMD stock is down 17% this year.
“To some extent, I think (stock prices) can still go down, but I don’t think it’s possible for them to go down,” Santosh Rao, head of research at Manhattan Venture Partners, told Yahoo Finance’s Morning Brief (see video above). I think most of it is factored in.” “They really missed the boat. I think chips have evolved, but they’re still in the original computing business, and now training, AI, inference, and all these other areas are becoming important. … So they have to figure it out. It takes a little bit of time.”
Admittedly, 2024 wasn’t a stellar year for the storied semiconductor giant.
On December 1st, Intel parted ways with CEO Pat Gelsinger, who had been in conflict.
For more than three years, Mr. Gelsinger led an aggressive effort to turn around the struggling U.S. semiconductor maker. The effort ranges from cutting thousands of jobs to improve costs and securing CHIPS Act funding from the Biden administration to building chip manufacturing plants and developing high-speed AI chips to compete with market leader Nvidia (NVDA). A wide range of things.
People familiar with the matter told Yahoo Finance at the time of the decision that the board had lost confidence in Gelsinger and that change was needed by 2025.
Intel has named CFO David Zinsner and former head of client computing Michelle Johnston Holthaus as interim co-CEOs. Holthaus was also named CEO of Intel Products.
Following Gelsinger’s departure, Intel will likely bring in a top name from outside the company to fill the CEO role, Wall Street sources told Yahoo Finance.
If you’re a permanent CEO, you’ll have a hard time cleaning up after yourself. It starts with repairing trust with investors and deciding whether to continue with the foundry business after failing to meet financial goals. You also need to stabilize your finances immediately.
In its November earnings release, Intel disclosed non-cash charges totaling $15.9 billion related to inventory write-downs and lower earnings estimates for certain businesses, including self-driving car company Mobileye (MBLY), in which it holds a majority stake. .
The company reported an operating loss of $5.8 billion on sales of $4.4 billion from Intel Foundry, Intel’s emerging chip manufacturing business.
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