The loss of CEO Pat Gelsinger from chipmaker Intel (INTC) has left the company’s future looking a bit shaky. But it gets even worse as Intel lost a lot of ground under Gelsinger’s leadership, and a new report from The Wall Street Journal reveals just how much it lost.
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The report noted that Gelsinger was involved with Intel for a long time as he began with the company as an entry-level technician. Those who interviewed Gelsinger years ago found him “…smart, very aggressive and somewhat arrogant.” That might sound like mixed praise, but the notes also said: “He’ll fit right in.”
Gelsinger took over as CEO in 2021, and, in the process, cost Intel $150 billion worth of value. To be fair, Intel lost a lot of ground well before Gelsinger’s arrival, as many of its key rivals were getting ahead of it. Gelsinger’s mandate was clear: make up for lost time. That was what Gelsinger set out to do, and put a lot of focus on chip manufacturing, a move which ultimately failed to produce the intended results.
Still Not Producing Results
Speaking of results, this was a point underscored shockingly well by the 18A manufacturing process that is said to be failing Intel. The yield rates connected with this process are only hitting about 10%. This is hindering mass production to the point where it is impossible to carryout, say media reports.
We had heard previously that Broadcom (AVGO) was not happy with the 18A process, noting similar issues with yield rates that left 18A unable to reach high-volume mass production. At the time, Broadcom shutdown its orders with Intel and started looking for better options. Now, we have a better idea of just what kind of yield rates were being generated, and the news is anything but good.
Is Intel Stock a Buy?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 22 Holds and six Sells assigned in the past three months, as indicated by the graphic below. After a 48.93% loss in its share price over the past year, the average INTC price target of $24.43 per share implies 17% upside potential.
