Intel (NASDAQ: INTC) stock surged nearly 7% on Monday, making it the biggest gainer on the Nasdaq and one of the top performers on the S&P 500. The rally followed a Reuters report detailing incoming CEO Lip-Bu Tan’s plans to revitalize the struggling chipmaker.
Reuters, citing two people familiar with Tan’s plans, reported that he is exploring “significant changes” to Intel’s manufacturing processes and its artificial intelligence (AI) strategies.
Tan will officially become CEO on Tuesday, replacing Pat Gelsinger, who retired late last year. Analysts and investors have welcomed the appointment, which Intel announced last Wednesday.
According to the Reuters report, Tan is weighing cuts to Intel’s middle management ranks and aims to prioritize attracting new clients to its foundry business. Gelsinger had worked to expand its contract manufacturing business to compete with companies like Taiwan Semiconductor Manufacturing Co. (NYSE: TSM), and Tan looks to build on that progress.
Analysts and Intel executives told Reuters that signing “at least two large customers to produce a high volume of chips” could be the key to turning the foundry business into a success.
In a regulatory filing on Friday, Intel (NASDAQ: INTC) announced that Tan will receive an initial base salary of $1 million. He has also agreed to purchase $25 million in Intel stock within his first month as CEO.
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Kevin Putnam is a financial journalist and editor based in New York. He specializes in editing news and analysis related to U.S. stock market. Read Full Bio
