Aniket PujariIntel has chosen a new chief executive, and analysts feel it was a step in the right direction for the once-dominant U.S. chipmaker. On Wednesday, Intel said it appointed Lip-Bu Tan – the former CEO of software company Cadence Design Systems – its new CEO. He replaces interim co-CEOs David Zinsner and MJ Holthaus, who took over in December following the ouster of former CEO Patrick Gelsinger. Tan’s appointment, effective March 18 , marks Intel’s fourth permanent CEO in seven years. The stock surged about 15% after the stock market opened Thursday, bringing the year-to-date recovery to some 19%. But over the past year, Intel has collapsed 45%, even with this year’s gain. While most analysts lauded the new CEO, many kept to the sidelines in terms of recommending the stock, keeping hold or market perform ratings. Here’s what some analysts had to say. Bank of America upgrades Intel to neutral from underperform The bank also increased its price target to $25 from $19, implying nearly 21% upside from Wednesday’s close. “We really like the new CEO appointment (effective Mar-18) given LipBu’s: 1) solid track record of success at Cadence Design Systems (CDNS) (32x stock appreciation versus SOX 16x), 2) his company knowledge based on prior stint on INTC’s board, 3) his breadth of relationships and investments across the US/Asian semi-industry landscape as Chairman of Walden Intl., a venture capital firm. The upside potential however is balanced against risks from a lack of AI roadmap and increasing competition from ARM-based PC and server CPU rivals, amidst a tough macro environment.” Wells Fargo rates Intel equal weight The firm has a price target of $25, also suggesting 21% upside potential. “While the hiring of Mr. Tan is extremely notable in itself, the move in INTC shares is likely being driven by views of Mr. Tan’s openness to consider broader strategic moves — i.e., prospin / accelerating corporate actions. As a reminder, Mr. Tan surprisingly resigned from Intel’s board in Aug ’24 after less than 2-yrs, which raised questions over disagreements with Intel’s revival strategy, including Intel Foundry.” Deutsche Bank reiterates a hold rating on Intel The bank has a $23 price target, reflecting more than 11% upside from Wednesday’s close. “We are pleased to see this leadership transition occur in a timely fashion, and believe Lip-Bu to be well-equipped to meet the demands of the job. We look forward to monitoring any strategic shifts he may undertake going forward, but as we have cited in numerous notes, nearly every strategic choice will require patience.” Bernstein rates Intel market perform The firm has a $25 price target. “We view Lip-Bu’s ascension here as positive for Intel, or at least a reason to hope. He has a big job in front of him and a lot of wood to chop, though it does seem increasingly likely something will have to change giving investors something more concrete to play for (and if he fails, it was probably unfixable).” Morgan Stanley rates Intel equal weight The firm’s price target is $25. “We are going to avoid rushing to judgment – we did that the last time – but directionally it does seem like a good outcome. His industry knowledge is very strong, he is respected in the business, and he is realistic and pragmatic, in our view. … That said, he does not have a background in process technology development, manufacturing, foundry, or hardware product enablement/marketing, all of which are key areas for Intel – but he should have the ability to enable others in those roles. If the company maintains a priority on world class foundry development – which from his after hours comments appears to be the case – we would particularly like to see the company acquire more experience in that area.”
