Why Intel Stock Fell 17% in December

Shares of Intel (NASDAQ: INTC) faced a significant decline in December, dropping by 17%. This decline was largely triggered by the unexpected departure of former CEO Pat Gelsinger, which raised concerns about the company's stability as it navigates a competitive chip market.

Once viewed favorably by investors, Gelsinger's departure soon revealed deeper issues within Intel. The company appointed two interim co-CEOs to lead during this challenging period: CFO David Zinsner and Michelle Johnston Holthaus, the CEO of Intel Products. However, the lack of a permanent CEO left Intel vulnerable, especially as it is undergoing substantial changes, including a recent announcement to reduce its workforce by 15%.

Intel's shift toward a foundry model—where it aims to manufacture chips for other companies—adds further complexity to its leadership search. With Gelsinger's exit, Intel currently finds itself without a strong leader to negotiate the complexities ahead, and the difficult task of filling this key position has proven to be daunting.

Current Status and Future Prospects

In December, Intel also took steps to revitalize its board by adding two new members, amid discussions about possibly spinning off the foundry business entirely. Yet, the negative spotlight on its leadership transition hindered its stock performance further.

As January unfolded, Intel's share prices remained stagnant, and criticism from sources like The Wall Street Journal pointed out that the company is losing market share to competitors, including AMD, particularly in data center revenues. Even the unveiling of new AI PC chips at the CES event didn't lift investor spirits, as rival company Nvidia continued to dominate the headlines.

The challenges Intel faces right now are substantial. Finding a capable leader could help steer the company back on track, but the road ahead seems fraught with difficulties. Many analysts suggest that the situation may worsen before any signs of improvement appear.

Intel, stock, CEO