Intel Corporation (INTC) Stock Prediction & Analysis: New CEO Acknowledges Past Failures as Stock Slides

Intel Corporation (INTC) Stock Prediction & Analysis: New CEO Acknowledges Past Failures as Stock Slides

TLDR:

• Intel stock fell 3% Tuesday, pushing below its 50-day moving average with poor IBD ratings
• New CEO Lip-Bu Tan acknowledged Intel’s innovation struggles in his first public comments
• Intel has begun “risk production” on its new 18A chip-manufacturing process
• Intel’s foundry business posted a $13.4 billion operating loss in 2024
• Reports suggest TSMC may take control of Intel’s foundry business, though Tan supports continuing the strategy

Intel Corporation has faced challenges recently, with its stock tumbling nearly 3% on Tuesday. This decline pushed the once-dominant chip manufacturer below its 50-day moving average.

The company’s position in the semiconductor industry has weakened substantially. Intel, which once led the sector, now ranks 12th in its group according to Stock Checkup scores from Investor’s Business Daily.

The IBD ratings paint a concerning picture. Intel has a Composite Rating of just 13, an Earnings Per Share Rating of 6, and a Relative Strength Rating of 27. These scores are far from the ideal rating of 99 in each category.

This poor performance has attracted attention from options traders looking for bearish positions. One potential strategy is a bear put spread targeting further downside in Intel’s stock price.

Intel’s new CEO, Lip-Bu Tan, has acknowledged these struggles. During his first public appearance at Intel Vision 2025, Tan was candid about the company’s difficulties.

“I love this company. It was very hard for me to watch it struggle. I simply cannot stay on the sideline knowing I could help turn things around,” Tan stated. “I also fully recognize it won’t be easy.”

A Legacy of Innovation Lost

Tan directly addressed Intel’s innovation shortcomings. “For quite a long time, we fell behind on innovation. As a result, we have been too slow to adapt and to meet your needs,” he admitted.

The CEO placed responsibility for Intel’s current situation on the company itself. He promised to “pull together strong teams to correct the past mistakes” and earn customer trust again.

This approach marks a departure from his predecessor, Pat Gelsinger. Analyst Stacy Rasgon noted that Tan “clearly does not suffer from the almost delusional optimism that torpedoed his predecessor.”

Tan outlined several key priorities. He plans to refocus the company on “essential ingredients of innovation,” strengthen the balance sheet, drive efficiency, and attract new talent while regrouping existing employees.

Intel’s stock has lost about 50% of its value over the past 12 months. The company has struggled with declining quarterly revenue and its foundry business continues to strain its finances.

Manufacturing Milestone Offers Hope

Despite these challenges, there are potential positive catalysts on the horizon. Intel executives announced the company has begun “risk production” on its new 18A chip-manufacturing process.

This announcement came during the Intel Vision conference in Las Vegas. Risk production involves low-volume testing before scaling up to higher volumes.

Intel claims its 18A process could give it a technological advantage over rival Taiwan Semiconductor Manufacturing. The company plans to start manufacturing its next-generation Panther Lake processors using this process in the second half of 2025.

Stifel analyst Ruben Roy highlighted the importance of this timeline. “The 2H roll-out of Panther Lake seems to be a necessary milestone to hit, in order to get volumes ramping and is a key timeline metric we now know to watch,” Roy noted.

While producing Intel’s own chips will provide some validation of its manufacturing capabilities, attracting external customers will be the true test of success. Reports indicate Nvidia and Broadcom are currently testing the 18A process.

Foundry Challenges Persist

One of Intel’s biggest issues is its foundry business. Under Gelsinger, Intel attempted to transform this division into a third-party manufacturer similar to TSMC.

However, the foundry operation has been losing money at an alarming rate. It posted an operating loss of $13.4 billion in 2024, and Intel doesn’t expect it to break even until 2027.

Recent reports suggest potential changes to the foundry business structure. According to the New York Times, the Trump administration is working with TSMC to help that company take control of Intel’s foundry operations.

Reuters reported that TSMC has approached Nvidia, Broadcom, and AMD about forming a joint venture that would own less than 50% of Intel’s foundry business. However, Nvidia CEO Jensen Huang stated he was unaware of such plans.

Despite these reports, Tan expressed support for continuing Intel’s foundry strategy during his speech. “As we strengthen our Intel products, we are equally committed to building a great foundry,” he said.

Tan emphasized the growing global demand for chip production and the need for flexible, resilient, and secure supply chains. “Intel foundry plays a crucial role. We will continue to advance our foundry strategy to meet our needs,” he stated.

Investors will be watching closely for more details at Intel’s upcoming Foundry Direct Connect event on April 29. The company is expected to provide additional information about its turnaround strategy at that time.

Intel’s recovery will undoubtedly be challenging. Gelsinger was given nearly four years to turn the company around before Tan’s appointment. Only time will tell how much patience the board will have with Tan’s approach.

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