Intel shares rally further as CEO change fuels ‘light at the end of the tunnel’ hope

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Intel Corp. won praise for replacing its chief executive when several analysts improved the chip giant’s shares. Intel INTC shares, + 4.23%, rose 5.1% in Thursday morning trading, capitalizing on 7.0% gains from Wednesday’s session after the company announced that VMware Inc. VMW , + 1.86% CEO Pat Gelsinger would take over Intel’s top job. .

Intel has suffered a series of missteps in recent years that caused the company to lose its leadership in process technology. Even when analysts seemed to agree that there is no quick response to the company’s current challenges, they are optimistic that Gelsinger’s technology expertise and decades of previous Intel experience will enable it to tackle future problems. “With 30 years at Intel, including the position of Chief Technology Officer, then a successful stint at VMware, he brings experience more relevant to the unique requirements of Intel’s work than any other candidate,” wrote Morgan Stanley analyst John Moore. He raised the stock to overweight from the same peso and raised his price target to $ 70 from $ 60 in a note Thursday morning titled: “No quick fix, but with Gelsinger, there is light at the end of the tunnel.” Opinion: Can Intel’s ‘Wonder Boy’ Get Steve Jobs Out? BMO Capital Markets analyst Ambrish Srivastava took a similar view. “We have seen time and again how the right person at the helm can affect change,” he wrote. “While we do not expect big changes in the short term, the wealth of experience that Pat Gelsinger brings from his previous tenure at Intel, as well as his experience running VMware, we believe he is the right person who can tackle the daunting, but not the challenges. insurmountable that Intel faces ”. Srivastava improved Intel’s stock to outperform the market and raised its price target to $ 70 from $ 50, arguing that “even a few incremental correct steps should serve as a catalyst for the shares.” At the same time, he downgraded the shares of rival Advanced Micro Devices Inc. AMD, -1.13% of the shares to a below-market performance, and wrote that while AMD has performed very well lately, its shares also seem have benefited from weak execution at Intel. Another update came from Cowen & Co. analyst Matthew Ramsay, who wrote about “equilibrium restored” at Intel now that an “Intel-developed technologist” has returned to run the company. “It’s hard to overstate the importance of Mr. Gelsinger’s hiring, not just for Intel, but also for the US technology / semiconductor industry.” After years of letting his manufacturing leadership evaporate, we’ve long argued that what was once the world’s largest semiconductor supplier needed a technology leader to solve its technology problems… and we did. “In Ramsay’s view, the hiring suggests a” renewed focus on internal 7-nanometer and 5-nanometer roadmaps that are critically important to Intel’s turnaround and US technology leadership. ” Ramsay raised his rating on Intel shares to outperform the market and raised his price target to $ 75 from $ 50. Of the 38 analysts tracked by FactSet covering Intel shares, 13 have buy ratings, 16 are rated retention and nine have sell ratings, with an average price target of $ 57.03. Intel shares have gained 11.2% over the past three months, as the Dow Jones Industrial Average DJIA, + 0.37% has risen 9.4%.