Intel stock rockets 8% on talk of new chief’s AI chip strategy

Intel’s (INTC+8.25%) next chief executive isn’t formally due for work until Tuesday, but there’s already talk of an artificial intelligence-strategy revamp under Lip-Bu Tan.

Investors sent the stock soaring on Monday after a Reuters report on the incoming CEO’s revitalization plans, which include pushing Intel into territory dominated by rivals Nvidia (NVDA-1.53%) and ARM (ARM+3.76%).

Intel stock jumped more than 8% to about $26 at 1:25 p.m. in New York. The rise over the past week has all but offset its loss in the market correction, and it’s now up almost 29% so far this year. Nvidia, which soared with the AI hype cycle, is down about 14% from January 1.

In addition to boosting sales for Intel’s foundry business, which makes chips designed by other firms, Tan intends to make chips for AI servers, foundation models, and robotics, Reuters (TRI+1.07%) said, citing people familiar with the subject. Intel had neglected those markets, allowing ARM to rise in smartphone chips and Nvidia to dominate in AI.

Last week, Tan told attendees of a company town hall that “tough decisions” were needed to revive Intel, possibly including further job cuts targeting middle managers. The company eliminated about 15,000 positions last year.

An Intel spokesperson declined to comment on the story to Quartz.

Tan will join Intel after running Cadence (CDNS+3.69%), which makes product-design software and hardware, for more than a decade. He was also a founding partner at VC firm Walden and sits on the boards of Credo Technology Group (CRDO-3.73%) and Schneider Electric.