By Angela Palumbo

Intel stock soared Thursday after the company announced its new chief executive officer, as investors bet this could be the start of its turnaround.

Intel said Wednesday that Lip-Bu Tan -- a former board member -- will be stepping into the role of CEO on March 18. Investors were pleased with the decision. The stock closed up 4.6% on Wednesday and was up 16% Thursday afternoon to $24.06. It was on pace for its largest percentage increase since March 13, 2020, according to Dow Jones Market Data, and was the best performer in the S&P 500 index on Thursday.

"We really like the new CEO appointment," BofA Securities analyst Vivek Arya wrote in a note, where he upgraded shares of Intel to Neutral from Underperform and increased his price target on the stock to $25 from $19. Arya added that Tan had a strong record of success as CEO at his previous company, Cadence Design Systems.

Cadence -- a chip design software company -- reported 2024 sales of $4.64 billion on Feb. 18, which was a 13% increase from the previous year.

Melius Research's Ben Reitzes is also optimistic about Tan's appointment. He wrote in a note that "his work with Cadence, the leader in semiconductor design software, means he has great relationships with both potential foundry customers -- and a deep knowledge of quality chip design for the products division." Reitzes rates Intel as a Hold with a $23 price target.

Shares of Intel have dropped 44% over the last 12 months. Former Chief Executive Pat Gelsinger retired in December after the company struggled to compete in the intense artificial intelligence semiconductor market against mega players such as Nvidia and Taiwan Semiconductor.

Intel's foundry, or chip-making business, made $17.5 billion in revenue in 2024, a 7% drop from the previous year, while losing $13.4 billion. But investors got a boost of confidence earlier this year as Vice President JD Vance vowed the Trump administration would implement policies to ensure AI chips will be made in the U.S.

The stock has now risen 19% this year compared with a 5.3% drop from the S&P 500.

Reuters also reported Wednesday that Taiwan Semiconductor has pitched Nvidia, Broadcom and Advanced Micro Devices the idea of taking stakes in a joint venture to operate Intel's chip-fab operations.

Intel declined to respond to a request for comment on the report. However, Tan wrote in a memo to the company on Wednesday that "we will work hard to restore Intel's position as a world-class products company, establish ourselves as a world-class foundry and delight our customers like never before."

"This comment could imply that Tan wants to keep the company together for now," Reitzes wrote, adding that doesn't rule out some type of partnership and financial arrangements that could reduce risks "and Intel's capital intensity."

Write to Angela Palumbo at angela.palumbo@dowjones.com

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March 13, 2025 12:57 ET (16:57 GMT)

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