Intel’s New CEO Just Dropped a Bombshell — Is This the Comeback Investors Have Been Waiting For?

Intel (NASDAQ:INTC) just kicked off a major shake-up under new CEO Lip-Bu Tan, and he’s wasting no time making big moves. Tan is set to slash middle management, overhaul the company’s AI strategy, and double down on Intel’s foundry businessa division that has struggled to keep up with Taiwan Semiconductor Manufacturing (NYSE:TSM). With Intel posting a $19 billion loss in 2024, its worst since 1986, Tan is on a mission to revive the company’s competitive edge. His strategy? A leaner, faster, and more aggressive Intel, capable of not just designing top-tier chips but also manufacturing them for giants like Microsoft and Amazon.

But the market just threw Intel a curveball. Shares dropped 5.6% at 12.33pm, after Taiwan’s National Development Council shut down speculation that TSMC was eyeing a buyout of Intel’s foundry business. Earlier reports had suggested TSMC was in talks with Nvidia, AMD, and Broadcom about taking stakes in a joint venture to run Intel’s chip factories. That rumor fueled a 22% year-to-date rally in Intel’s stock. With TSMC’s denial, investors are left wondering if Intel can pull off a solo turnaround or if it’s still searching for a lifeline.

Now, the pressure is on Tan to deliver. His success hinges on locking in major clients and ramping up production of Intel’s next-gen AI chip, Panther Lake. The company is betting big on this chip to compete with Nvidia’s dominance in AI processors, but time is running out. If Intel can’t prove its foundry business is viable, it risks falling even further behind. With Wall Street watching closely, Tan’s next moves will determine whether Intel stages a historic comebackor cements its decline.

This article first appeared on GuruFocus.