Intel Corp (NASDAQ:INTC, ETR:INL) has appointed industry veteran Lip-Bu Tan as its new CEO, a move analysts at Bank of America believe could significantly improve the company's turnaround potential.
Analysts upgraded Intel's stock rating from 'Underperform' to 'Neutral,' raising their price target to $25 from $19.
Shares of Intel added almost 14% at about $23 during Thursday's session on the leadership update.
The bank’s analysts highlighted Lip-Bu’s solid track record at Cadence Design Systems, his prior role on Intel's board, and his deep ties across the semiconductor sector in the United States and Asia.
“We believe Intel has a greater opportunity to restructure/turn things around under his leadership,” analysts wrote.
However, they noted the upside potential is balanced against risks from a lack of AI roadmap and increasing competition from ARM-based PC and service CPU rivals amid a tough macroeconomic environment.
JV rumors
Intel’s ability to restructure and improve its manufacturing efficiency will be key under Tan's leadership, the analysts believe.
Separate from Lip-Bu’s appointment, Bank of America flagged unconfirmed reports of a potential joint venture between Intel's foundry division and Taiwan Semiconductor Manufacturing Co (ADR) (NYSE:TSM), which could involve major fabless firms like Nvidia, AMD, and Qualcomm.
While details are unclear, such a partnership could support Intel’s efforts to address manufacturing challenges, the analysts believe.