Intel shares jumped 8.1% today, leading both the S&P 500 and Nasdaq 100, as investors welcome incoming CEO Lip-Bu Tan's restructuring plans. The stock has gained over 21% in the past five trading sessions ahead of Tan taking the helm Tuesday.
Tan reportedly aims to revamp Intel's manufacturing operations and AI strategy while addressing a bloated middle management layer. At a recent town hall, he warned of "tough decisions" despite Intel already cutting 15,000 jobs last year.
The new CEO plans to improve performance at Intel Foundry, which lost $13.4 billion last year, by courting new customers including Nvidia and Broadcom. Rather than spinning off manufacturing, Tan appears committed to improving efficiency to better compete with TSMC.
Intel also hopes to develop a new AI chip architecture by 2027 with annual releases thereafter, aiming to gain ground in a market dominated by Nvidia. Separately, the company has unveiled today XeSS 2 technologies to enhance gaming performance on Intel hardware.
Tan faces significant challenges, with Intel reporting a $19 billion loss in 2024 after a decade of strategic missteps. The former Cadence CEO and previous Intel board member resigned last August over differences regarding his proposed changes. Investors now appear optimistic that his industry knowledge and decisive approach could restore Intel's profitability and technological leadership.
Intel (Interval D1)
The stock is trading above 23.6% Fibonacci retracement level and is approaching 250-day SMA at $26.25. Bears will try to move below 23.6% Fibonacci retracement level and target 38.2% Fibonacci retracement level which coincides with 200-day SMA. Bulls on the other hand will try to recapture local top at $27.57. RSI is approaching the overbought zone in bullish divergence while MACD widens after bullish divergence.
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