Intel Corp.’s shares soared after CEO Lip-Bu Tan took over as CEO, but analysts are now questioning how he will address the company’s decline and fix its manufacturing and product lines.
Tan warned employees that it won’t be easy to stem Intel’s decline, but didn’t specify how he plans to tackle the problems. Analysts are divided on whether he’ll try to break up the company or work from within to revamp its operations.
The stock has risen 24% since Tan’s appointment, adding $22 billion to the company’s market value. However, shares fell about 1% in early trading Tuesday, alongside a broader-market slip.
Tan promised to re-establish Intel as a “world-class foundry” for chips, but analysts are unclear if he plans to split its foundry business from its chip-design arm. This decision could impact the company’s prospects and competition with Taiwan Semiconductor Manufacturing Co.
Intel’s recent struggles are linked to its failure to compete in AI chip development. The stock has fallen about 60% from its peak in early 2000, erasing more than $330 billion in market value for investors.
Analysts now expect a net loss of 28 cents per share in 2025, down from earnings of roughly 12 cents per share three months ago. Fewer than 10% of analysts recommend buying Intel, and the recommendation consensus is tied with the worst in the semiconductor index.
The company’s future looks shaky amid macroeconomic uncertainty and declining demand for AI chips. Intel’s revenue forecast has been repeatedly cut, and estimates now expect a decline in earnings and revenue.
Source: https://finance.yahoo.com/news/intel-ceo-faces-show-moment-101046934.html