Chipmaker Intel Corp. (NASDAQ: INTC) surprised investors and shocked the tech world when it announced it would be replacing CEO Bob Swan next month. Swan is being replaced by Pat Gelsinger, a prominent tech industry figure who once served as Intel’s CTO. Most recently, Gelsinger helped create and grow VMware (NASDAQ: VMW), a world leader in virtualization and software technologies.
Intel has recently lost its leadership in the microprocessor market, falling behind in process technology to rival Advanced Micro Devices (NASDAQ: AMD). Analysts are hopeful that Gelsinger will be able to bring the company back to the top.
Who is Incoming Intel CEO Pat Gelsinger?
Gelsinger has a long history with Intel. He worked for the company for 30 years, including as its Chief Technology Officer. Gelsinger was a close friend and protégé of the late intel President and CEO Andrew Grove, who led the company for 11 years.
When Gelsinger left Intel, he helped form VMware, a company that is known globally for its virtualization solutions. VMware is used by enterprises for virtualization tasks that reduce costs and reliance on hardware devices.
Under Gelsinger’s leadership, VMware has risen from a small company to one of the world’s biggest technology companies with a market capitalization of $55.91 billion, yearly revenue of almost $12 billion, and an incredible gross margin of 83.36%. The company was generating just $4.5 billion in revenue when Gelsinger joined.
Known for his charity work and his empowering leadership style, Gelsinger was named the best CEO in America by Glassdoor in 2019, receiving a 99% approval rating from former and current employees.
He has frequently been rumored as the next person to lead Intel. The company made it official this week.
Analysts are Confident in Gelsinger’s Abilities
When the announcement was made earlier this week, analysts increased their price targets for Intel. The most bullish estimate now sees the stock climbing to as high as $82.00 per share in 2021. The stock is now up more than 13% over the last five days.
Gelsinger has both the leadership and technical expertise to help bring Intel out of its slump, although it could take until next year to see the results of his leadership and any changes that he implements.
Investors looking to benefit from the recent surge in confidence should expect to hold this stock for the long-term. Buying at today’s price could be a viable strategy for anyone looking to capitalize on the leadership shakeup and the benefits it could bring.
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