Intel (NASDAQ:INTC) has ridden a rollercoaster over the past three years – though unfortunately, it’s spent most of that ride heading downhill.
That downward trajectory has served as a wake-up call for company leadership, prompting a recognition that major changes are overdue – particularly as Intel watches rivals cash in on the AI boom while it lags behind.
In response, the Board of Directors made a move in March, appointing Lip-Bu Tan as Intel’s new leader. Tan is best known for his transformative leadership at Cadence Design Systems, where he oversaw a stock price increase of more than 3,000% between 2009 and 2021. This track record positions him as a potential catalyst to breathe new life into the struggling chipmaker.
Wasting little time, Tan has already begun charting a new course for Intel. He’s announced plans to reshape the company into an “engineering-focused company,” and has initiated sweeping cost-cutting measures, including the elimination of as many as 20,000 jobs.
Such actions have caught the attention of investors. Among them is Rafa F. Oliver, who argues that Tan has what it takes to revive the Silicon Valley pioneer’s fortunes.
“Intel Corporation is a buying opportunity because the new CEO has vast experience in the industry and has turned around a company before,” the investor opined.
Oliver foresees two different pathways for Intel to pursue – both of which the investor believes will generate value for shareholders. In the first, Tan resolves Intel’s core inefficiencies, allowing the company to grow in step with its peers. That scenario, Oliver says, would drive the stock up more than 40%. But the second path is even more compelling: if Intel spins off its foundry business in 2026, Oliver believes the stock could soar by as much as 173%.
The investor believes the dual focus on chip design and manufacturing has long dragged down Intel’s margins. By narrowing its focus to one area, the company would be better positioned to boost profitability and compete more aggressively in the next phase of the tech race.
“If we compare peers in both industries, the design business is that much more profitable, but it is clear that you are not as efficient in a hybrid model as in a pure manufacturing of advanced chips,” Oliver adds.
Regardless of which road Tan leads Intel down, the time to scoop up INTC shares is now, declares Oliver. The investor therefore rates INTC shares a Strong Buy. (To watch Oliver’s track record, click here)
Wall Street, however, remains firmly on the sidelines. Of the 31 analysts covering the stock, 26 have issued Hold ratings, just one is bullish, and 4 recommend selling – resulting in a consensus Hold (i.e., Neutral) rating. The average 12-month price target stands at $21.29, suggesting a modest upside of roughly 5% from current levels. (See INTC stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.