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Intel (NASDAQ:INTC) shares soared 15% on Thursday after the company named Lip-Bu Tan as its new CEO, giving investors hope for a turnaround. But while analysts see potential, they're also keeping expectations in check.
KeyBanc's John Vinh said he's encouraged by Tan's appointment, pointing to his 12-year leadership at Cadence Design Systems (NASDAQ:CDNS) and his previous experience on Intel's board. Still, with Intel facing big challenges, Vinh is holding off on getting too bullish, sticking with a Sector Weight rating.
Morgan Stanley's Joseph Moore also acknowledged Tan's strong industry reputation, but noted he lacks experience running a company of Intel's size. Moore was particularly interested in Tan's comments about sticking with foundry development, which suggests Intel isn't looking to sell off parts of its business.
However, with server delays, a tough AI race, and $10 billion in foundry losses, Moore doesn't see an easy fix. He's staying with an Equal-Weight rating and a $25 price target.
Meanwhile, Bank of America's Vivek Arya sees more upside, upgrading Intel to Neutral. He believes Tan has a real shot at turning things around, especially given Intel's strong position in enterprise PC and server chips. Arya also thinks Intel might offload assets like Altera and its automotive division to help clean up its balance sheet.
While analysts agree Tan is a solid choice, Intel's turnaround is still a work in progressand Wall Street will be watching closely to see what moves he makes next.
This article first appeared on GuruFocus.