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Takeaways
- Intel shares rose Thursday after the chipmaker announced that Lip-Bu Tan was its new CEO. The announcement raised hopes of a turnaround.
- Bank of America and Deutsche Bank analysts highlighted the former Cadence Design Systems CEO's strong track record and experience in the semiconductor industry.
- Analysts also suggested that a joint venture could be beneficial, after reports of deal discussions.
Intel (INTC), the struggling chipmaker, named Lip-Bu Tang its new CEO on Thursday, raising hopes of a turnaround.
The stock jumped nearly 15% to close at $23.70, leading gains on the S&P 500, even as a broader market sell-off dragged the index into a correction. Intel shares have still lost almost half their value in the past year.
Bank of America analysts noted that Tan has a “solid track-record of success” in his role as former CEO of Cadence Design Systems CDNS, a semiconductor company that has partnered Intel. “We believe INTC has greater opportunity to restructure/turn the things around under Tan’s leadership,” they added.
The analysts upgraded their rating for Intel's stock to “neutral” from "underperform" after the announcement, and raised their price target to $25 from $19.
Deutsche Bank analysts echoed their sentiments, calling Tan's appointment a "desirable outcome" for Intel, and highlighted his "extensive expertise in the semiconductor ecosystem." The bank maintained a $23 price target and "hold" rating.
Tan’s potential appointment to the leadership position could be a sign of a strategic change. Intel has been rumored for months that it might sell parts of its company or form new partnerships.
Reuters reported that Taiwan Semiconductor Manufacturing Company approached Nvidia, Advanced Micro Devices, Broadcom and Broadcom about forming a joint-venture to run Intel’s Foundry. Analysts at BofA said that such an arrangement could “help INTC’s possible turnaround efforts under the new CEO.”
UPDATE—March 13, 2025: This article has been updated since it was first published to reflect more recent share price values.
