Key Points in This Article: President Trump called for Intel‘s (INTC) CEO resignation, citing a “conflict of interest” over his relationship to companies with ties to China's military.
Shares of Intel (INTC) fell in premarket trading Thursday after President Donald Trump called for new CEO Lip-Bu Tan's immediate resignation.
Intel's stock is falling as Trump's comments open the door for potentially more leadership drama at the chip giant.
Request adds to troubled chipmaker's challenges, follows scrutiny from Sen. Tom Cotton
Intel shares were under pressure Thursday after President Donald Trump called for the chipmaker's CEO to resign immediately.
I maintain my Hold rating on Intel due to heavy restructuring charges, impairments, and ongoing Foundry losses weighing considerably on margins. I see Intel Foundry's $3.2 billion operating loss as the company's biggest drag; in my view, divesting the foundry unit is the only clear path to reversing sentiment. Management is raising cash through asset sales and the networking spin-off, but I'm concerned these proceeds will mostly offset ongoing foundry cash burn rather than fund real growth.
President Trump's aggressive chip tariffs and political support position Intel as a key beneficiary, despite ongoing company-specific challenges. Intel's U.S.-based manufacturing and potential policy-driven advantages make it a speculative but attractive risk capital bet in the current political climate. Intel's fundamentals remain weak, with negative growth and profitability, but even modest improvements could justify its current valuation if turnaround efforts succeed.
Overall, I consider Intel Corporation's Q2 earnings report a “State of the Union” address for the company by its CEO Lip-Bu Tan. I appreciate his candor and objective assessment of challenges ahead. Aggressive CAPEX spending has led to underutilized assets and negative free cash flow, necessitating disciplined capital allocation moving forward.
Three senior executives in Intel's manufacturing operations are set to retire, Intel told Reuters on Thursday, as new CEO Lip-Bu Tan implements sweeping change to resuscitate the struggling U.S. chipmaker.
I am downgrading Intel Corporation from Buy to Hold due to continued weak results, missed earnings, and lack of clear turnaround signals. Intel faces declining margins, operating losses, and is losing market share to AMD and Nvidia, making a near-term recovery unlikely. Management's restructuring efforts, including asset sales and workforce cuts, are necessary but risk stifling future growth if overdone.
Intel stock (NASDAQ:INTC) has barely moved this year, up just 2%, as the company continues to struggle with shrinking relevance in its core CPU market and underwhelming progress in its foundry ambitions, despite investing over $50 billion in the space. Revenue has collapsed from $79 billion in 2021 to $53 billion in 2024.
Intel (INTC) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.