Intel's shares jumped about 15 percent as Wall Street applauded the company's choice to appoint Lip-Bu Tan, a former board member who departed in August due to disagreements over the chipmaker's course, as CEO following years of poor market performance.
Tan will have to turn around the company's financial situation after it lost out on the semiconductor boom fueled by artificial intelligence while investing billions of dollars to expand its chip manufacturing operations.
Over the last five years, when the S&P 500 and Nasdaq Composite Index have more than doubled in value, Intel's shares has lost roughly 60 percent of its value.
The company has also reported several quarters of market share losses in data centers and PCs, in addition to billion-dollar losses in its manufacturing division.
Tan pointed to his intention to turn Intel into a top foundry, which is the industry term for a contract chip manufacturer, and analysts anticipate that Tan would follow Gelsinger in keeping the chip design and production processes together.
According to some analysts, the foundry industry would have trouble attracting orders from chip designers who are hesitant to entrust production to a competitor.
However, experts noted that Tan, who managed more than ten years of robust expansion at Intel supplier and chip-design software Cadence Design Systems, had a solid reputation as a "neutral party" who may assist Intel in overcoming some of the obstacles.
After shares fell 60 percent last year and its Gaudi AI processors failed to meet sales objectives, Intel's market worth has stayed below $100 billion for the first time in thirty years.
LSEG data reveals that more experts advise investors to "sell" the company rather than "buy" it, with the majority holding a "hold" rating.
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Rasgon stated that Tan "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)."