Intel Corp (NASDAQ: INTC) says its chief executive Pat Gelsinger has retired, effective December 1st.
David Zinsner, its chief of finance and MJ Holthaus, its chief of products will serve as interim co-CEOs as the chipmaker looks for a permanent replacement.
Gelsinger has retired from the company’s board as well and Frank Yearly has assumed the role of the company’s interim executive chair, as per a press release on Monday.
Intel stock is up 5.0% following the announcement.
Intel stock continued to struggle under Pat Gelsinger
Pat Gelsinger took the helm of the struggling semiconductor giant in 2021.
But he evidently failed to score a successful turnaround at Intel over the past three years considering the company’s stock price tanked an alarming 65% during his tenure.
Nonetheless, things have ticked up a little for Intel in recent months. The Nasdaq-listed firm swung to a profit in its latest reported quarter as revenue declined a less-than-expected 6.0% to $13.28 billion.
INTC has also announced plans of separating its foundry business to enable outside funding and lowering its global headcount by more than 15% as part of its $10 billion cost-cutting initiative.
Additionally, the US government finalised a $7.86 billion grant last week that will enable Intel to set up factories and contribute to the country’s commitment to on-shoring chip manufacturing.
Citi remains bearish on Intel share price
Despite a few positive developments in recent months, Citi analysts remain cautious on Intel stock.
The investment firm reiterated its “neutral” rating on the chipmaker and lowered its price target to $22 last month. That suggests about a 12% downside from current levels.
Citi remains dovish on INTC as its analysts are skeptic of the company’s foundry business that is yet to turn a profit. They, however, acknowledged at the time that divesting those operations could benefit Intel shareholders.
Plus, the $7.9 billion grant was meaningfully lower than $8.5 billion expected – a disappointment Citi attributed to execution issues as well as the Ohio plant delay.
Intel’s incoming CEO may have a rough road ahead
All in all, whoever joins Intel as its permanent CEO likely has a tough job on their hand.
That’s because the chipmaker is yet to crack the artificial intelligence market. It’s struggling to maintain, let alone gain market share against the likes of AMD and Nvidia.
Even in the foundry space, rivals including Taiwan Semiconductor Manufacturing and Samsung remain a force to be reckoned with.
TSMC currently owns over 50% of the global foundry market. In comparison, Intel has secured a place on the list of top 10 foundries only recently.
Nonetheless, Intel stock currently pays a dividend yield of 2.08% that makes it somewhat more attractive at least for the income investors.
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