New Tan, New Plan: Can Intel Finally Get It Right?
Intel’s bold move signals a major shift in leadership—can Lip-Bu Tan steer the tech giant back to dominance?
Editorial Team (ET)May 8, 2025
In a dramatic market shift, Intel’s stock surged nearly 15% on Thursday as Wall Street applauded the appointment of Lip-Bu Tan as the company’s new CEO. The move comes at a crucial moment for Intel, which has been struggling with declining market share, mounting losses, and an inability to capitalize on the AI-driven semiconductor boom. Investors view Tan’s leadership as a much-needed jolt of optimism for the struggling tech giant.
A CEO with Deep Industry Ties
Lip-Bu Tan is no stranger to the semiconductor industry. As a former Intel board member and the long-time CEO of Cadence Design Systems, he brings an extensive network of connections across the chip ecosystem. Analysts at TD Cowen see Tan as Intel’s best possible choice, citing his “deep relationships” that could attract major customers to the company’s contract manufacturing business.
Intel has been in desperate need of a turnaround. Over the past five years, its stock has lost nearly 60% of its value while rivals such as Nvidia and AMD have thrived. The company has also struggled to compete in data centers and PCs, while its manufacturing arm has posted billion-dollar losses. Investors are now hoping that Tan can reverse these trends and steer Intel toward sustainable growth.
Challenges Ahead for Intel
Despite the market’s initial enthusiasm, Tan faces an uphill battle. Intel has been losing ground to competitors like Taiwan Semiconductor Manufacturing Company (TSMC) and Broadcom, both of which have been rumored to be evaluating Intel’s chip design and marketing business. There’s also skepticism about whether Intel can succeed in its foundry ambitions, as many chip designers remain hesitant to outsource production to a direct competitor.
Tan has already hinted at his strategy. In a letter to employees, he emphasized his commitment to making Intel a top foundry, indicating that he intends to keep the company’s chip design and manufacturing operations together. While this aligns with the vision of previous CEO Pat Gelsinger, execution will be key. Analysts warn that convincing customers to trust Intel’s foundry business will be no easy task.
A Realistic Approach to Turnaround
Unlike Gelsinger’s often overly optimistic projections, Tan appears to be taking a more pragmatic approach. His prior two-year tenure on Intel’s board has given him a deep understanding of the company’s structural issues. Bernstein analyst Stacy Rasgon believes this will help Tan avoid the missteps of his predecessor.
“That should have given him a pretty good idea of where all the bodies are buried, and he should be much more realistic in his evaluations and outlook than prior leadership,” Rasgon noted.
However, change won’t happen overnight. Tan has already acknowledged that Intel’s turnaround will take years. The company’s market value has stagnated below $100 billion for the first time in three decades, and its AI chip ambitions have yet to yield significant results. Analysts remain cautious, with more firms recommending a “sell” rating than a “buy,” and most opting for a neutral “hold” stance.
Investor Sentiment Shifts—For Now
Despite the long road ahead, Intel’s sudden stock surge reflects renewed investor confidence—at least in the short term. There’s a growing sense that Tan’s leadership could bring meaningful change, or at the very least, force Intel to confront its weaknesses with a fresh perspective.
As Rasgon put it, Tan “has a big job in front of him and a lot of wood to chop.” Whether he succeeds or not, one thing is clear: something at Intel will have to change, and investors now have a reason to watch closely.
