Intel Stock Surges on New CEO – The Real Story Runs Deeper

Key Points

• Intel stock rallies by over 11% on news of a newly appointed CEO, but the optimism goes well beyond this announcement, according to fundamentals.
• Wall Street analysts and institutional capital like the future of Intel, as it carries a double-digit upside.
• The market is paying a premium for Intel's future earnings, and for a reason, it will likely beat.

When investors spot a great company to buy at an even greater price, they should know that a few unexpected things might happen shortly after. If they did, in fact, choose the right investment, they won’t be the only ones in the market going after it, which is why there are often sudden announcements around the company that send it rallying out of the blue, but that often feels like a plan beforehand.t

Everyone has seen it, from takeover announcements to surprise earnings results or even a new appointment to the management team. Today, investors can see this happening in shares of Intel Co. NASDAQ: INTC, as the company announced a new CEO to run the company after Pat Gelsinger, its former leader, stepped down recently.

The market’s reaction to this event was bullish, to say the least, but the reason for the rally goes well beyond this.

Before investors dig deeper into the reasons behind the rally, and whether there is much more upside to be had in Intel stock, getting to know who the new CEO is would be a great start, as there are several key points that will play out in the coming years under his new leadership. Intel is one of the biggest technology sector laggards, but that might soon change.

Who is Lip-Bu Tan?

An ex-MIT graduate with an MBA and a track record of success, that’s the short story for the newly appointed Intel CEO, but that’s not what markets are excited about today. Intel stock rallied by over 11% in overnight trading on the news, so there must be something beyond just a fancy degree and experience in the industry.

Tan served as the CEO of another company in this space, Cadence Design Systems Inc. NASDAQ: CDNS, where he took the role starting in 2008. Since then, the company’s stock has delivered a massive return of over 5,500%, leaving the S&P 500 in the dust.

Markets may believe that he can do this again, this time with Intel. While the two companies are not the same, they share enough similarities for Tan to replicate this success. Now, investors must ask the question of why a successful technology executive would join a company that has fallen to 46% of its 52-week high.

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Hidden Tailwinds in Intel Stock

Now that President Trump is looking to accelerate the domestic manufacturing sector in his agenda for domesticating the supply chain of several products, including semiconductors, Intel will play a critical role in this race. Already having a significant presence in Ohio and Arizona, Intel is prepared to take on this task.

Even if it is not the first in line, compared to other names like Taiwan Semiconductor Manufacturing NYSE: TSM, investors can rest assured that the stock’s low price has baked in much worse news. If anything, Intel offers one of the best risk-to-reward ratios in the market today, and that’s undeniable.

Knowing that Intel stock is a so-called “Low-hanging fruit,” institutional buyers from UBS Asset Management decided to boost their holdings in Intel by as much as 8.2% as of February 2025. After this allocation, the group now holds up to $1.3 billion worth of Intel stock, bringing their ownership to 1.5% of the company.

As bullish as this may seem, these buyers weren’t the only ones looking to express their optimism for intel stock today. Around the same period in February, analysts from Cantor Fitzgerald decided to boost their valuation targets on Intel stock to $29 per share, a significant jump from their previous $22 valuation.

This new target implies that Intel has a potential rally of up to 40% built into it from where it trades today. Even as high as that may seem, it isn’t even close to the 52-week high level of just over $45 per share, which is a more reasonable target for investors to keep in mind during this shift to domestic manufacturing.

The Market’s Take on Intel Stock

Investors should consider two other gauges for Intel stock today, which are directly related to the market’s view and sentiment for a stock. First is the level of short interest, which measures how willing short sellers are to bet on the company’s decline.

Over the past month, a short interest decline of nearly 9% would signal to investors that bearish capitulation has occurred. More than that, it can be safely assumed that more bullish sentiment might be growing around Intel stock.

The second is valuation multiples, such as the forward price-to-earnings (P/E) ratio, where Intel trades at a massive premium above peers with its 42.3x multiple. While some may call this expensive, seasoned traders will remind everyone that markets will always overpay for stocks they believe will outperform peers and the broader market as well.