Topline

Intel’s chief executive has retired effective immediately, the venerable Silicon Valley company announced Monday, a restructuring that follows a prolonged period of underperformance in the semiconductor chip maker’s stock markets.

Important facts

Big number

-53%. This is how much Intel shares achieved during Gelsinger’s 3.5-year tenure as the chip manufacturer’s top manager. The benchmark S&P 500 stock index returned 69% in the period, while its American chipmaker Nvidia gained more than 900%.

tangent

Notably, Intel’s ongoing stock market troubles came at a time when its top competitors were doing remarkably well as capital flowed into the companies driving the artificial intelligence revolution. According to FactSet data, Intel was the 16th worst-performing stock in the S&P over the past decade, with a return of -16%. Meanwhile, Intel’s main competitors Nvidia and Advanced Micro Devices are by far the best-performing large American companies, as Nvidia rose nearly 28,000% and AMD rose 5,000%, according to FactSet data.

Important background

Analysts expect Intel to report its first annual loss since 1986 this year. It’s been a remarkably disappointing period for the chipmaker, which suffered its worst day on Wall Street in 50 years this summer when it suspended its dividend and announced a 15% cut in its workforce. The decline comes despite an $8 billion grant from the Biden administration’s CHIPS Act and strong interest in semiconductor chips amid the generative AI boom, with much of Intel’s difficulties stemming from its relatively disappointing performance in the AI ​​space is attributable.

Main critic

“Ultimately, you need excellence, innovation and execution; We saw none of this during Pat Gelsinger’s reign,” Rosenblatt analyst Hans Mosesmann wrote in a Monday note to clients.