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Microsoft (MSFT) co-founder Bill Gates vividly remembers Intel (INTC) firing on all cylinders back when he was a young coder.
But getting back to that point will be brutally hard, if it can happen at all.
“Well, it’d be great for the United States if their process, technology arm could be a credible alternative to Taiwan Semiconductor (TSM) and Samsung. They’re trying to do that, but that takes time and a lot of capital so that is a very, very hard thing,” Gates told me on Yahoo Finance’s Opening Bid podcast (video above; listen in below).
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Continued Gates, “Technology is full of these cautionary tales. When I was growing up, IBM (IBM) dominated the big computers. They were the computer industry. IBM is still around, but you know, IBM is tiny compared to Microsoft … So you have to be very humble about, wow, if you miss a turn in the road, you can be annihilated.”
Intel has done a lot of surprising in the past year — all on the downside.
The tech icon parted ways with embattled CEO Pat Gelsinger on Dec. 1.
Gelsinger led aggressive efforts to turn around the troubled US chipmaker for more than three years. Those efforts included slashing thousands of jobs, improving costs, securing CHIPS Act funding, building chip foundries, and promising fast AI chips that compete with Nvidia (NVDA) and AMD (AMD).
Intel named CFO David Zinsner and former head of client computing Michelle Johnston Holthaus as the interim co-CEOs. Holthaus was also named Intel Products CEO.
Intel will likely fill the CEO role by bringing in a top name from outside the company, Wall Street sources have told Yahoo Finance since Gelsinger’s departure.
Any permanent CEO will have a mess to clean up. That starts with repairing trust with investors after missed financial targets and deciding whether to continue chasing a foundry business. It also requires immediately stabilizing the financials.
Intel’s fourth quarter sales fell 7% year over year to $14.3 billion. Net earnings plunged 76%.
The company forecasts it will only break even on the profit line this year.
“From day one, we have been working closely together alongside the board to drive better execution of our strategy. There are no quick fixes,” Holthaus said on Intel’s earnings call.
Wall Street’s lack of confidence in Intel is seen in its ratings. Of the 45 analysts that cover Intel, Yahoo Finance data shows 80% rate the stock a Hold.
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