After struggling for over a year, Intel’s (INTC) prospects are about to change. In response to the new leadership, INTC stock gained 10% on Wednesday in after-hours trading.
Lip-Bu Tan will lead Intel as the CEO. Tan is a former board member and Cadence Design (CDNS) CEO. Last August, he stepped down from Intel’s board of directors. He reportedly left because of concerns about Intel's ability to turn its business around. He opposed former CEO Pat Gelsinger on running the firm with too many staff. In addition, Tan did not like Intel’s aversion to risk. Finally, he wanted a different strategy for artificial intelligence.
The new leadership should wake the firm up. Nvidia (NVDA) has a commanding lead in selling AI servers. Conversely, Intel’s Gaudi AI solution is trailing. The firm also needs to catch up with Advanced Micro Devices (AMD), whose MI300 series accelerators target the AI markets.
Upside for INTC Stock
Intel is hiring the right person for the job. Tan has background experience at Cadence and is well-respected in the semiconductor industry. From here, Intel may adjust its business strategy to start leading in innovation instead of falling behind.
Investors looking for other beat-up chip stocks besides Intel may consider Skyworks (SWKS), Marvell (MRVL), Qorvo (QRVO), and Micron Technology (MU).
