intel stock (NASDAQ:INTC) The sudden “retirement” of former CEO Pat Gelsinger last month is further evidence that the company is in turmoil as it struggles to keep pace in the fast-growing chip sector. As a result, stock prices rose sharply again.
While investors are pinning hopes on a recovery, the CEO’s firing is the latest evidence that the company faces tough challenges at a time when it can’t afford to fall behind.
As a result, the stock ended the month down 17%, according to data from S&P Global Market Intelligence. As you can see from the chart, the stock price plummeted immediately after the CEO’s announcement, continued to fall from there, and fell again after the Federal Reserve lowered its outlook for interest rate cuts in 2025.
Investors initially reacted positively to the news that Mr. Gelsinger would be stepping down, but it didn’t take long for that glow to fade as investors realized that a plan for Mr. Gelsinger’s replacement was lacking. It seems like it was.
Intel has named two interim co-CEOs to replace Gelsinger: CFO David Zinsner and Intel Products CEO Michelle Johnston (MJ) Holthaus. The move puts Intel in the midst of a major transition and leaves it without a permanent leader. Intel is in the midst of a multi-year transition to a new foundry model that will open its own factories, which it announced in August it would lay off 15% of its workforce, to external customers.
Forcing Mr. Gelsinger to leave without a replacement would mean the company would lose leverage in negotiations with management, and given the company’s struggling business, low stock price and transition to a foundry model, the company would sell this position. can be difficult.
So it’s no surprise that the company hasn’t filled Gelsinger’s position more than a month after his departure.
Intel made other moves last month, including adding two new members to its board of directors, sparking rumors that it might separate its foundry business entirely. However, negative media attention regarding the company’s efforts to find a new CEO also appears to have weighed on the stock price.
The stock has been flat since January, as the Wall Street Journal criticized the company for losing market share in several areas and lagging even behind AMD in data center revenue. .
Investors also ignored the company’s latest AI PC chip announcements at CES in Las Vegas this week, while Nvidia received the most attention.
There is no doubt that Inter are in a deep hole at the moment. A talented leader may be able to lift the company up, but it looks like the company’s problems are going to get worse before they get better.
story continues
