Intel stock (INTC) will enter the year 2025 penal areawith an uncertain time frame for when he could return to the rink.
Intel shares are down 60% year to date, lagging well behind the Nasdaq Composite’s 29% rise (^IXIC). Meanwhile, shares of rival chipmaker Nvidia (NVDA) are up 173% this year as the company acquires a major leadership in artificial intelligence chip innovation compared to Intel and AMD (AMD). AMD shares are down 17% this year.
“I think to some extent they do [the stock] it can still go down, but I think most of that is priced in,” head of research at Manhattan Venture Partners said Santosh Rao in Yahoo Finance’s Morning Brief (see video above). “They’ve really missed it. I think chips have evolved and they’ve still stayed with the original computing business, but now it’s more about training and artificial intelligence and inference and all the other areas … so that’s got to be picked up by the side. It’s going to last.”
To be sure, 2024 was not a stellar year for the famous chip giant.
Intel parted ways with CEO Pat Gelsinger conflicts on December 1st.
For more than three years, Gelsinger led an aggressive effort to turn around the struggling US chipmaker. These efforts ranged from cutting thousands of jobs to improving costs and safety CHIPS Act money from the Biden administration building chip factories and promising high-speed AI chips that compete with market leader Nvidia (NVDA).
A person familiar with the matter told Yahoo Finance at the time of the decision that the board had lost confidence in Gelsinger and that a change was needed before 2025.
Intel named CFO David Zinsner and former head of client computing Michelle Johnston Holthaus as interim co-CEOs. Holthaus was also named executive director of Intel products.
Intel is likely to fill the CEO role by bringing in a top name from outside the company, Wall Street sources told Yahoo Finance after Gelsinger’s departure.
Each Permanent Executive Director shall have a clean up the mess. That starts with rebuilding trust with investors after missing financial targets and deciding whether to continue chasing the foundry business. It also requires urgent financial stabilization.
When it reported earnings in November, Intel disclosed $15.9 billion in total non-cash charges related to inventory write-downs and lower performance expectations for certain businesses, such as autonomous driving company Mobileye (MBLY), in which he owns a majority stake.
The company reported an operating loss of $5.8 billion at Intel Foundry — Intel’s new chip company — on $4.4 billion in sales.
