Intel's stock price plummeted by 6% on Tuesday, following the announcement of the departure of CEO Pat Gelsinger, whose leadership was overshadowed by a significant loss in market share and a substantial shortfall in artificial intelligence advancements. The company's shares experienced their most challenging day since September and have seen a value erosion of over 50% throughout the year. Intel disclosed on Monday that CFO David Zinsner and Intel Products CEO MJ Holthaus would temporarily share the CEO responsibilities, as the board and a dedicated search committee actively seek a permanent replacement for Gelsinger. Additionally, long-standing board member Frank Yeary has been appointed as the interim executive chair.

Analysts at Cantor expressed their doubts about the ability of any single leader to turn the company's fortunes around, stating in a client note on Tuesday that Gelsinger was not the cause of Intel's struggles and that they do not foresee an immediate solution. The firm has assigned a hold rating to Intel's stock. The company's revenue has seen a 6% decrease in the most recent period, with a year-over-year decline observed in nine out of the past eleven quarters. In contrast, competitor Nvidia has reached a market capitalization of over $3 trillion and is at the forefront of the artificial intelligence revolution, with tech giants such as Amazon, Meta, and Alphabet increasingly purchasing Nvidia's graphics processing units at a rapid pace.

Gelsinger, who took over from Bob Swan as CEO in 2021, presided over Nvidia's ascent, which coincided with Intel losing market share in its core PC and data center business to Advanced Micro Devices. Concurrently, Intel has been pivoting a significant portion of its operations towards becoming a foundry, manufacturing processors for other chip manufacturers. This has proven to be an expensive endeavor, with the company announcing in September that the foundry would become an independent subsidiary, allowing it to secure external funding.

"Many of the recent issues have stemmed from the insistence on pursuing the foundry business," Citi Research analyst Chris Danely told. "They continue to lose billions each quarter." Danely further noted that the pressure on Pat Gelsinger intensified when the foundry business experienced significant margin contraction over the summer.

After Intel's fiscal second-quarter earnings report in August, the stock price plummeted by 26%, marking its steepest decline in 50 years and the second-worst day ever. Gelsinger announced at that time that the company would be reducing its workforce by 15% as part of a $10 billion cost-saving initiative.

Cantor analysts predict that more cuts are likely in store for Gelsinger's successor. "We anticipate a more aggressive cost-reduction strategy and a faster sale of non-core assets," they wrote. "However, these measures do not address the foundry issue—essentially, there are no high-volume external customers."

Intel's decision to part ways with Gelsinger comes at a critical juncture for the company, as it grapples with the challenges of a rapidly evolving technology landscape and increasing competition. The search for a new CEO is expected to be a top priority for the board, as they seek a leader who can steer the company towards renewed growth and innovation.

The interim co-CEOs, Zinsner and Holthaus, will be tasked with maintaining stability within the company while the search for a permanent CEO is underway. Their combined experience and knowledge of Intel's operations will be crucial in ensuring continuity and managing the day-to-day affairs of the business.

Frank Yeary, as the interim executive chair, will play a pivotal role in guiding the board and providing strategic direction during this transitional period. His long-standing relationship with the company and deep understanding of its operations will be invaluable in navigating the complexities of the CEO search and ensuring that the company remains on a steady course.

The skepticism expressed by Cantor analysts highlights the broader challenges facing Intel. The company's struggles are not solely attributable to Gelsinger's leadership but are instead part of a larger narrative involving market dynamics, technological advancements, and competitive pressures. As such, the search for a new CEO must extend beyond finding an individual with the right skill set and experience; it must also involve a reevaluation of the company's strategic direction and a commitment to addressing the underlying issues that have contributed to its recent setbacks.

Intel's revenue decline and the rise of Nvidia underscore the urgency of the situation. The company must find a way to regain its competitive edge in the PC and data center markets while also capitalizing on the opportunities presented by the artificial intelligence boom. This will require a leader who can not only navigate the immediate challenges but also has a clear vision for the company's future and the ability to execute on that vision.

The foundry business, which has been a significant drain on Intel's resources, must be reevaluated. The company must determine whether it can successfully compete in this space or if it should focus its efforts elsewhere. This decision will have far-reaching implications for Intel's future and will be a key factor in the success of the company's next CEO.

As the board and search committee embark on the process of finding a new CEO, they must consider not only the immediate needs of the company but also the long-term strategic direction. The next leader of Intel will need to be a visionary who can steer the company through the current challenges and position it for success in a rapidly changing technology landscape.

In conclusion, Intel's recent stock price decline and the departure of CEO Pat Gelsinger mark a significant turning point for the company. The search for a new CEO presents an opportunity for Intel to reevaluate its strategic direction and address the underlying issues that have contributed to its recent struggles. The company must find a leader who can navigate the complexities of the current market, capitalize on the opportunities presented by artificial intelligence, and position Intel for long-term success.