Intel (INTC) stock is up 10% in after hours trading on news that the chipmaker has named Lip-Bu Tan as its new permanent CEO.
Tan previously served as CEO of Cadence Design Systems (CDNS), which makes software used by all the major chip designers, including Intel. Tan has also served on the board of directors at Intel, although he departed last year saying he had other commitments.
Tan replaces Intel’s interim co-CEOs David Zinsner and MJ Holthaus, who took over running the company last December after the abrupt departure of former CEO Pat Gelsinger. Tan is also rejoining Intel’s board. He takes the helm of the chipmaker as it tries to recover from a tumultuous four-year run under Pat Gelsinger when its stock declined nearly 75%.
Way Forward
Under Gelsinger’s leadership, Intel spent billions of dollars in an effort to pivot from solely designing microchips and processors to also producing them through a new foundry business. The costly and difficult transition ultimately cost Gelsinger his job as investors pressured the company to reduce costs and spinoff businesses amid declining sales.
Intel is in the process of building a $20 billion chip factory in Ohio. The company has been accused of losing focus and missing the booming artificial intelligence (AI) market and losing ground to rivals such as Nvidia (NVDA) and Advanced Micro Devices (AMD). INTC stock was removed from the Dow Jones Industrial Average last year and replaced by Nvidia.
Tan now becomes the fourth permanent CEO at Intel in the last seven years. There are rumors that Intel might be a takeover target, although no deals have yet emerged. INTC stock has declined 52% in the last 12 months.
Is INTC Stock a Buy?
The stock of Intel has a consensus Hold rating among 31 Wall Street analysts. That rating is based on one Buy, 25 Hold, and five Sell recommendations issued in the last three months. The average INTC price target of $22.76 implies 10.06% upside from current levels.
Read more analyst ratings on INTC stock
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