Intel Corporation INTC shares are soaring to their highest level since late July Wednesday following the company's announcement of a transition in the C-suite.
What Happened: Intel said CEO Robert Swan will leave Feb. 15, with VMware, Inc. VMW CEO Pat Gelsinger taking over.
The announcement brings to an end Swan's two-year tenure at Intel as CEO. Swan took over the role on an interim basis in June 2018, replacing then-CEO Brain Krzanich, and was later confirmed as the full-time CEO in January 2019.
Swan previously served as the CFO of the chip giant.
Gelsinger has over four decades of technology and leadership experience, including 30 years at Intel, where he began his career.
"After careful consideration, the board concluded that now is the right time to make this leadership change to draw on Pat's technology and engineering expertise during this critical period of transformation at Intel," Omar Ishrak, independent chairman of the Intel board, said in a statement.
Related Link: Intel Analyst: Challenges In 2021 Look 'Substantial'
Why It Matters: Gelsinger takes over at a time when Intel is under tremendous pressure to reclaim its lost glory. The company has ceded its technology leadership to rivals such as Advanced Micro Devices, Inc. AMD and NVIDIA Corporation NVDA thanks to a series of product missteps, execution issues, market share erosion and the loss of some customers such as Apple Inc (NASDAQ: AAPL).
Analysts have begun calling for a break-up of the company to arrest market share loss.
Intel sees the new appointment as aiding a transformation from a CPU to a multi-architecture XPU company.
Intel Reaffirms Guidance: Intel said the leadership transition is unrelated to its 2020 financial performance.
The company said it expects fourth-quarter revenue and EPS to exceed prior guidance provided Oct. 22. The guidance calls for revenue of about $17.4 billion for the fourth quarter and $75.3 billion for the full year. Earnings per share are expected at $1.10 for the quarter and $4.90 for the year.
Intel also said it has made strong progress on its 7nm process technology and plans on providing an update when it reports its fourth-quarter results Jan. 21.
Price Action: Reacting to the announcement, Intel's shares were trading 8.61% higher to $57.82, while rival AMD was seen slipping 2.97% to $92.52. VMware shares were receding 6.97% to $132.95.
Related Link: 5 Reasons To Stay Positive On Intel
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