Intel CEO Pat Gelsinger spoke while holding a new chip called Gaudi 3 at an event called AI Everywhere in New York on Thursday, December 14, 2023.
Seth Wenig | AP
intel Shares fell 6% on Tuesday, a day after the embattled semiconductor maker announced the firing of Chief Executive Officer Pat Gelsinger. His four-year tenure was marred by declining market share and major failures in artificial intelligence.
Stocks had their worst day since early September and have lost more than half their value so far this year.
Intel announced Monday that CFO David Zinsner and Intel Product CEO MJ Holthaus will serve as interim co-CEOs, and that its board and search committee will “work diligently and quickly to find a permanent successor for Mr. Gelsinger.” did. Long-time board member Frank Yeary will serve as interim executive chairman.
Kantar analysts are skeptical that any one leader can revive the company, saying in a note to clients on Tuesday that Gelsinger is not responsible for Intel’s challenges and that there are “no easy solutions.” I don’t see any way to do that.” The company has a rating equivalent to a hold rating on stocks.
Intel’s revenue fell 6% in the most recent period and has declined on a year-over-year basis in nine of the past 11 quarters. Meanwhile, rival chip makers Nvidia The company has a market capitalization of more than $3 trillion and is at the center of an artificial intelligence boom as tech giants such as Amazon, Meta and Alphabet increasingly add to its graphics processing units. .
Gelsinger, who succeeded Bob Swan as CEO in 2021, has steered Nvidia’s rise to power, but also at the same time as Intel’s core PC and data This coincided with the loss of market share in the center business. advanced micro device. At the same time, Intel refocused most of its company into foundries that make processors for other chipmakers. It’s an expensive proposition, and the company announced in September that it would make the foundry an independent subsidiary, allowing it to raise external financing.
“A lot of the problems these days are due to the focus on the foundry business,” Citi Research analyst Chris Daenley said Monday on CNBC’s “Money Movers.” “They’re still losing billions of dollars every quarter.”
When the foundry business showed a significant decline in profits over the summer, Daenley added, “the clock started ticking on Pat.”
Following Intel’s fiscal second-quarter earnings report in August, stock prices fell 26%, the biggest decline in 50 years and the second-worst day on record. Gelsinger announced at the time that the company would cut 15% of its workforce as part of a $10 billion cost-cutting plan.
Kantar analysts said Mr. Gelsinger’s eventual successor will likely face further job cuts.
“We believe a more aggressive cost-cutting strategy and rapid divestiture of non-core assets is likely to occur,” they wrote. “But at the end of the day, this doesn’t solve the foundry problem; it simply doesn’t have a ton of external customers.”
—CNBC’s Rohan Goswami and Kif Leswing contributed to this report.
