MW How Intel's CEO brought the storied company back from the brink
By Britney Nguyen and Hannah Pedone
Just two years ago, Intel's survival was an 'existential question.' Now the company is seeing new life.
Intel CEO Lip-Bu Tan joined the chip maker in March 2025.
Last August, just five months after taking the top post at embattled chip maker Intel, Lip-Bu Tan became a target for President Donald Trump.
The president called for Tan to resign immediately, citing concerns over his ties to China. Tan is "highly conflicted," Trump said on his Truth Social online platform. "There is no other solution to his problem," he added.
But less than a week later, Trump had changed his tune. He posted on Truth Social that he'd had "a very interesting" meeting with Tan, who swiftly made his way to the White House following questions over his stakes in Chinese firms and his time leading Cadence Design Systems $(CDNS)$ - a Silicon Valley electronic-design-automation provider that had pleaded guilty to illegally exporting semiconductor-design tools to China. Tan's visit to Washington was followed by an agreement later that month for the U.S. government to take a 10% stake in Intel $(INTC)$.
Investors saw the deal as a lifeline for the American chip pioneer, which had fallen steeply behind in the artificial-intelligence-chip race - another blunder on top of years of management miscalculations.
Now, a little over a year into Tan's tenure as Intel CEO, the chip maker is changing the narrative that it's an AI loser, as its central processing units have proven crucial to the next phase of the technology. Surging demand for its server CPUs to run agentic AI applications led to a stellar first-quarter earnings report that sent the stock up 23.6% to an all-time closing high on Friday, according to Dow Jones Market Data.
The results were "a good example of the tangible progress we're making on just executing better," John Pitzer, Intel's corporate vice president of investor relations, told MarketWatch.
See more: Intel's stock extends its spectacular run by posting its best day in nearly four decades
Intel's chip fab grew supply above expectations in the first quarter, Pitzer said, and the company "worked with customers better than we normally do" to meet their needs.
Intel looks to be "on its firmest footing in years," Seaport Research analyst Jay Goldberg said in a Thursday note. Under Tan's leadership, the chip maker is seemingly on the path to regaining its technical leadership and market position, he added.
The descent into irrelevance
Two years ago, Intel's survival "was an existential question," Goldberg told MarketWatch. "They had missed the boat entirely on technology."
One critical error, in his view, was Intel's failure to adopt the same extreme ultraviolet lithography equipment, essential to making advanced chips, as Taiwan Semiconductor Manufacturing $(TSM)$. The Taiwanese chip maker had overtaken Intel's lead in chip manufacturing years before, and was making chips for Intel's chief CPU rival, Advanced Micro Devices $(AMD)$.
Meanwhile, Intel has been striving to revive its foundry business, which manufactures chips for external customers. Wall Street is now banking a turnaround on the success of the company's forthcoming 14A process node, which refers to the generation of chip-manufacturing technology.
Tan's predecessor, Pat Gelsinger, had been focused on domestic chip manufacturing; under his leadership, the company made plans to invest more than $100 billion into sites across Arizona, New Mexico, Oregon and Ohio. Intel was also the largest recipient of the Biden administration's Chips and Science Act, which was intended to bring more chip making stateside.
But Gelsinger had fallen short in vital areas, Goldberg told MarketWatch, including failing to adequately cut costs and struggling to improve the overall company culture to incentivize employees.
He added that Intel had a "short-sighted focus" on moves that improved the company's day-to-day share price - like share buybacks - as opposed to its long-term technical capabilities.
Tan and agentic AI usher in a comeback
"It has been easy to not like [Intel]," Evercore ISI analyst Mark Lipacis said in a Friday note - pointing to its loss of chip-making leadership to TSM, threats to its x86 chip architecture from AMD and Arm Holdings $(ARM)$, and other missed opportunities that led the company on a downward spiral even before Gelsinger's tenure.
But the emerging "CPU renaissance," as Lipacis called it, could now see the ratio of CPUs to graphics processing units flip from 1:8 to 8:1. That's because as the industry moves towards agentic AI tools, which can complete tasks autonomously, more CPUs will be required to manage those increasingly complex operations.
Meanwhile, Tan has improved Intel's balance sheet, "and is executing on a strategy that appears to have put" the company on track to being competitive again, Lipacis said. The chip maker's operating margins have improved by 500 basis points since Tan took over in March 2025, and so has its debt situation, he added.
Additionally, Intel's position as the only leading-edge chip manufacturer in the U.S. has highlighted its strategic importance amid growing geopolitical tensions, Licapis noted.
Tan "was exactly the kind of CEO that Intel needed," Tigress Financial Partners analyst Ivan Feinseth told MarketWatch.
"The foundry business was the direction that Pat [Gelsinger] wanted to take the company, and Tan was able to take it in that direction," Feinseth said.
Intel's Pitzer told MarketWatch that cycle times and yields for its latest 18A process node were better than expected, and that engagements with customers for 14A "continue to progress really well."
The 14A process node also received a boost of confidence on Tesla's $(TSLA)$ earnings call earlier this week, when Elon Musk said it would be involved in his Terafab chip-making venture. Intel is collaborating with the Terafab, which aims to manufacture chips for Tesla and SpaceX. Pitzer said Musk and Tan share a similar view that there's a need for U.S.-based silicon innovation, and that supply isn't keeping pace with the AI-driven demand for chips.
For now, Intel "is (mostly) out of the woods in terms of medium-term survival," Seaport's Goldberg said in his note. But the verdict is still out on the viability of its foundry business, and whether it will be able to attract the customers it needs to propel Intel to the forefront of chip making once more.
Don't miss: Intel's stock has been 'absolutely on fire.' Now it needs to deliver on the hype.
-Britney Nguyen -Hannah Pedone
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April 25, 2026 08:30 ET (12:30 GMT)
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