Why Intel Shares Dropped 17% in December

Company shares Intel (NASDAQ: INTC) rallied again at the end of the month as the shock “retirement” of failed CEO Pat Gelsinger offered further evidence of the confusion the company is in as it struggles to keep pace in the booming chip sector.

Investors are confident they are hoping for a turnaround, but the CEO’s ouster is by far the most unique evidence of steep challenges at a time when an ailing company can provide funds to fall into stimulus.

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As a result, the stock fell 17 percent, according to S&P Global Market Intelligence. As you might have even seen from the chart, the stock fell shortly after the CEO’s announcement and stayed lower from there, falling again after the Federal Reserve lowered its 2025 price forecast.

INTC knowledge of YCharts

Intel goes from terrible to worse

Investors in the foundation responded positively to the notes Gelsinger turned into a resignation, although it did not deprive him of the long-lasting luster to get rid of, and investors gave the effect of worshiping the opinion to exchange him for missing.

Intel named two interim CEOs in Gelsinger’s position, CFO David Zinsner and Michelle Johnston (MJ) Holthaus, CEO of Intel Products. Intel is concerned about not using a permanent leader during a major transition, saying it will lay off 15% of its workers in August as it is in the middle of a multi-year transition to a brand new foundry model that opens its factories to outdoor customers.

Pushing Gelsinger into retirement and not using a replacement leaves the company with no leverage in executive negotiations, and the statement may even be a tough promotion, given the industry’s troubles, its floundering stock and its transition to a foundry dummy.

Because of this truth, it is no longer quiet that the company did not live up to this statement more than a month after Gelsinger’s departure.

What’s next for Intel?

Intel put together a few different strikes to close out the month, along with adding two new board members, and rumors swirled that it might even exit the foundry industry altogether. Still, negative media coverage of the company’s efforts to find a brand new CEO weighed on the stock further.

Shares were unchanged through early January, as The Wall Avenue Journal piled on the criticism and announced that the company was giving up market share in several areas and even fell into the incentive framework AMD in knowledge heart earnings.

Investors also shrugged off the launch of the company’s most unique AI computer chips at CES this week in Las Vegas, while Nvidia won most of the honors.

There might be no question that Intel is in a deep hole at this level. A talented manager would be willing to dig up the company, nevertheless it appears as if you admire the complications of the company, they will provide worse rather than increase, in the event that they ever hurt.

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Jeremy Bowman holds positions in Developed Micro Devices and Nvidia. The Motley Fool has positions and recommends developed micro devices, Intel and Nvidia. The Motley Fool recommends the following options: Short calls on Intel at $27 February 2025. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and are not necessarily those of Nasdaq, Inc.