Intel’s New CEO Has a $65B Track Record… And The 10% Pop Shows Investors Think He Can Fix This Mess

Yesterday, I came in hot with the unpopular take that Intel’s stock ticking up on reports of TSMC trying to buy its foundry business was actually a bad thing. Why? Because it proved Intel wasn’t some hot-shot partner in demand… it was for rent like an abandoned strip mall kiosk. But today’s news? Now we’re talking.

This morning, Intel pulled a Chipotle circa 2016 move and hired Lip-Bu Tan as its new CEO. If you don’t know who that is, imagine a guy with a deep tech resume who actually understands how to run a semiconductor business… something Intel’s past few CEOs have treated more like a failing Rust Belt steel mill. Tan, the former CEO of Cadence Design Systems, is the closest thing Intel could get to hiring a miracle worker. And the market noticed. Intel popped 10% on the news.

To appreciate how big this is, let’s take a quick detour to 2015 when Chipotle was getting killed by a series of E. coli and salmonella outbreaks. The stock tanked 47%, customers ran for the hills (or to McDonald’s), and the brand looked DOA. Then, in 2018, Brian Niccol (former CEO of Taco Bell) rolled in like a burrito-wielding gunslinger and turned things around with aggressive marketing, digital expansion, and, you know, actually making sure customers didn’t leave with food poisoning. The stock skyrocketed over 500% in the following years.

Intel is that version of Chipotle right now… except instead of E. coli, it’s been slowly losing all of its market share, getting trounced in AI chips by Nvidia, and watching TSMC absolutely destroy them in semiconductor manufacturing. This stock has been a 12-month-long horror movie, down 54% in the past year. And now it’s turning to Lip-Bu Tan for one last chance of survival before potentially bankruptcy.

Unlike his predecessors, Tan isn’t a finance bro trying to optimize shareholder value while failing to make decent chips (but doubling his salary every year). This guy knows the semiconductor game inside out. He was the former CEO of Cadence Design Systems, a company that basically supplies the brainpower behind chip design. 

You can’t design a modern chip without using Cadence software. He was also an Intel board member from 2022 to 2024, which means he’s seen Intel’s self-inflicted wounds up close and chose to leave when things got ugly under Pat Gelsinger. Now, he’s back with a mission. Tan also has a track record of turning companies around… Cadence is now a $65 billion juggernaut (up 282% the last 5 years), and he was a big part of making that happen.

Tan might be the right guy, but he’s inheriting a mess. Intel has lost its edge in chip manufacturing. TSMC is years ahead, and now they’re reportedly trying to straight-up take over Intel’s foundry business. That’s like your rich neighbor offering to buy your car because they assume you’re about to default on your loan. The AI war is already lost… for now. Nvidia is the king of the kill, AMD is the blue collar underdog (with way less talent), and Intel is the guy sitting on the sidelines of a pickup game, desperately trying to convince someone to let him play. 

Government bailouts aren’t enough. Intel got $8.5 billion from the CHIPS Act to build factories, but even those projects are delayed until 2030. Which is like saying, “Don’t worry, guys! We’ll be ready to compete in AI by the time your grandkids are in college.”

The market reaction tells you people think Tan can pull it off. And if he can pull an actual Brian Niccol, Intel might thrive again. The next few months will tell us a lot.

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Stock.News has positions in Intel and McDonald’s.