By Arsheeya Bajwa and Deborah Mary Sophia
(Reuters) – The resignation of Intel CEO Pat Gelsinger has brought an abrupt end to his role in the struggling chipmaker’s efforts to turn around, leaving Wall Street questioning whether its ambitious revival plan is headed for the chopping block.
A change at the top after a tumultuous year was welcomed by investors as Intel shares rose as much as 6% on the news before falling 0.5% on Monday.
Shares are down more than 50% this year as the country loses out on an AI-powered chipmaker rally. Nvidia has become the second most valuable company in 2024, while Intel’s market capitalization has fallen below $100 billion for the first time in three decades.
Intel struggled under Gelsinger as its plan to increase focus on its money-losing contract manufacturing business hurt cash flow.
Despite the spending spree, it failed to keep pace with its peers in an AI race and lagged behind Taiwan’s TSMC in chip manufacturing.
The company also missed out on an investment in AI juggernaut OpenAI, while Gelsinger’s comments about Taiwan cost Intel its low-cost chip manufacturing deal with TSMC.
Intel’s revenue shrank to $54 billion in 2023, almost a third less than the year Gelsinger took over.
Wall Street’s earnings expectations for the company have also fallen sharply, giving the stock a higher price-to-earnings ratio – a benchmark for valuing stocks.
(Reporting by Deborah Sophia and Arsheeya Bajwa in Bengaluru; Editing by Arun Koyyur)
