Intel's new chief executive, Lip-Bu Tan, offered his strategy for turning around the troubled chipmaker in a speech late Monday. He wants the company to have a startup mentality, focus on engineering and work more closely with customers. Intel stock analysts were cautious, saying there are no quick fixes for the company's problems.
Speaking at the company's Intel Vision 2025 conference in Las Vegas, Tan said he wanted to create a culture of innovation at the chipmaker.
"As CEO, my No. 1 priority has been spending time with customers," Tan said. "Under my leadership, Intel will be an engineering-focused company. ... We will listen closely and act on your input. Most importantly, we will create products that solve your problems and drive your success."
His strategy includes designing purpose-built silicon to enable key workloads for customers.
Tan also doubled-down on Intel's goal of establishing a world-class foundry to produce advanced chips. The company's Intel 18A process technology remains on schedule for high-volume production in the second half of the year, he said.
On the stock market today, Intel stock dropped 2.9% to close at 22.05. Year to date through Tuesday's close, Intel is up 10%. But last year, Intel stock plunged 60.1%.
Bernstein analyst Stacy Rasgon said Tan's speech "sounded more like an apology than anything else."
"The event was likely lighter on details than some might have hoped," he said in a client note Tuesday. "To be fair to Lip-Bu, he has been in the role for only 2 weeks, so hoping for more concrete actions was likely unreasonable at this point anyway."
Intel Stock: Analysts Stick With Neutral Ratings
Rasgon rates Intel stock as market perform with a price target of 25.
"It seems clear they are in for a slog as he tries to fix a myriad of issues around product and process, and attract and satisfy customers, all while delivering a massively needed cultural shift that has stymied multiple prior CEOs before him," Rasgon said.
Tan mentioned forthcoming efforts to strengthen Intel's balance sheet, but didn't offer specifics. Analysts speculate that Intel could divest its investments in Altera and Mobileye.
Truist Securities analyst William Stein praised Tan's speech in a report late Monday.
"We thought this was the most constructive message we've heard from Intel in ... for as long as we've covered the company," Stein said.
Highlights of his speech included Tan's emphasis on building a culture of innovation with a nimble, startup-like approach, he said. That includes attracting and retaining the best engineers.
Stein reiterated his hold rating on Intel stock with a price target of 21.
Evercore ISI analyst Mark Lipacis kept his in-line rating on Intel stock with a price target of 27.
"We are encouraged by his remarks but note that fixing (a) 110,000-employees organizational culture is no small task and will likely require at least several quarters for any measurable results," Lipacis said in a client note.
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