Intel CEO Pat Gelsinger speaks while holding a new chip called Gaudi 3 at an event called “AI Everywhere” in New York on Thursday, December 14, 2023.
Seth Wenig | Associated Press
Intel On Tuesday, the troubled chipmaker announced expel Chief Executive Pat Gelsinger’s four-year tenure was marred by market share losses and major missteps in artificial intelligence.
As of early afternoon trading, the stock was facing its worst day since early September and has lost more than half its value so far this year.
Intel said Monday that Chief Financial Officer David Zinsner and Intel Product Chief MJ Holthaus will serve as interim co-CEOs while the board of directors and search committee will “work diligently and expeditiously to find Gelsinger’s permanent successor.” Longtime board member Frank Yeary will serve as interim executive chairman.
Cantor analysts expressed doubt that either leader could revive the company, writing in a note to clients on Tuesday that Gelsinger was not accountable for the challenges facing Intel and that “we simply don’t see a quick fix.” Approach. The company has a Hold rating on the stock.
Intel revenue falls 6% in 2017 recent period Annual declines have occurred in nine of the past 11 quarters. Meanwhile, rival chipmakers NVIDIA The company has a market value of more than $3 trillion and is at the center of the artificial intelligence boom as tech giants such as Amazon, Meta and Alphabet snap up the company’s graphics processing units at an ever-increasing pace.
Gelsinger, who succeeded Bob Swan as CEO in 2021, has been at the helm during Nvidia’s rise while Intel lost market share in its core PC and data center businesses. AMD. Meanwhile, Intel has refocused much of the company’s operations into foundries, making processors for other chipmakers. The company said in September that it was a costly proposal that would result in the construction of a foundry Become an independent subsidiaryenabling it to raise external funding.
“A lot of the problems that have arisen recently are caused by the insistence on the foundry business,” said Chris Danely, an analyst at Citi Research. Tell CNBC’s “Money Moves” on Monday. “They’re still losing billions of dollars every quarter.”
Danley added that “the clock started ticking for Pat” when the contract business saw margins shrink significantly over the summer.
After Intel released its second-quarter earnings report in August, the stock fell 26%. Biggest drop in 50 years Also the second worst day ever. Kissinger announced at the time that the company would lay off 15% of its employees as part of a $10 billion cost-cutting plan.
Cantor analysts said Kissinger’s eventual successor is likely to make further cuts.
“We suspect a more aggressive cost-cutting strategy and accelerated sales of non-core assets are likely,” they wrote. “But ultimately, this doesn’t solve the foundry problem – it just doesn’t have a large number of external customers.”
—CNBC’s Rohan Goswami and Kif Leswing contributed to this report.
