When news media leaked rumors on Intel (NASDAQ:INTC) replacing its current CEO, the stock surged by 10%. Replacing Bob Swan is a game-changing move for the giant chip maker. Hiring CEO Pat Gelsinger, who is currently the CEO of VMWare (NYSE:VMW), will re-set Intel’s trajectory.
Before the management change, activist hedge fund Third Point had pushed for a strategy change. For example, Dan Loeb said that the company lost chip designers, which demoralized the status quo. Conversely, Advanced Micro Devices (NASDAQ:AMD), Samsung, and Taiwan Semi (NYSE:TSM) are increasing their market share and dominance in the semiconductor space.
Intel lost its way when it acquired MacAfee nearly a decade ago. It then bought Altera and Mobileye. Entering the autonomous driving space with the latter acquisitions proved prescient. Stocks like Ambarella (NASDAQ:AMBA) and NXP Semiconductor (NASDAQ:NXPI) are soaring in value as investors flock to the semiconductor segment. Intel’s stock did not fare as well. The stock trades at a price-to-earnings of just 11 times.
Your Takeaway
INTC stock surged by 11.5% in the last week but are down 3.5% in the last year. AMD gained 77% in that time. With the CEO’s appreciation of virtualization and cloud-based computing strength, Intel could re-orient itself toward growth again. It might gain market share in the PC market in the process.