Intel Stock Jumps As CEO Pat Gelsinger Retires: Retail Betting On External Hire
By Stocktwits Inc | First Published Dec 2, 2024, 9:41 PM ISTIntel named CFO David Zinsner and Michelle Johnston Holthaus interim co-chief executive officers while the board of directors searches for a new CEO.
Intel Corp. stock jumped over 3% as markets opened on Monday after the announcement of CEO Pat Gelsinger’s retirement, effective immediately, after 40 years with the PC-making giant.
The announcement comes as Intel navigates a turnaround plan grappling with challenges in adapting to the AI-driven shift in the semiconductor industry.
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It has named CFO David Zinsner and Michelle Johnston Holthaus interim co-chief executive officers while the board of directors searches for a new CEO. Holthaus has also been appointed to the newly created position of CEO of Intel Products.
While Intel does not seem to have a definitive succession plan, most retail investors, according to a poll on Stocktwits, expect the company to name an external hire as the new CEO.
Intel has been facing substantial headwinds this year. In August, the stock dipped to the lowest level since Nov. 2012 after the company suspended its dividend payout and announced plans to slash 15% of its workforce.
At the time, Bernstein analyst Stacy Rasgon described Intel’s situation as “approaching the existential.”
Mandeep Singh, Global Head of Technology Research at Bloomberg Intelligence, suggested that Gelsinger's ousting stemmed from his failure to define Intel’s strategic focus—whether to prioritize being a chip design company or a foundry business.
“The direction that Gelsinger picked, not picking a side, made markets doubt if the company can recover even in the medium term,” he said.
Intel’s foundry business handles chip manufacturing for both its products and external clients, while the chip design segment focuses on developing semiconductors for devices like PCs and servers.
Although both areas have faced challenges, the foundry business has been under more strain, adding to Intel’s broader struggles. In the third quarter of 2024, revenue from the segment dropped 8% year-over-year (YoY), and operating losses increased to $5.8 billion from $1.4 billion a year ago.
Retail sentiment around the stock flipped to ‘bullish’ (56/100) from ‘bearish’ a day ago, along with an uptick in chatter to ‘high’ (71/100) following the development.
Despite the uptick in overall sentiment, some users on the platform believe that Intel’s problems go beyond its CEO.
Intel’s stock has fallen 48% so far this year.
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