After a gain of $18 billion in under 60 minutes, you might ask how much are they paying this guy—this guy being new Intel CEO Pat Gelsinger.
Last night was Gelsinger’s chance to share what he’s learned about Intel’s problems since returning to the company two months ago and offer some answers about what the chip giant will do next. Before the public talk, I spoke to Gelsinger and he outlined an ambitious plan to spend big to get Intel back in the lead for chip manufacturing technology while also opening its fabs to make chips for rivals in order to solve the semiconductor supply crunch.
Gelsinger’s excitement was evident, his confidence palpable, and I think he told me that “the geek is back” at Intel three or four times. Thinking Wall Street might hear his strategy as “do everything, all at once, whatever it costs,” I asked how he thought the stock market would react. “I’m very confident that my board is 101% behind this,” he replied without any hesitation.
But it turns out the everything strategy was just what the stock market wanted to hear. Intel’s shares had been stuck in a rut, closing out 2020 at just under $50 a share, barely above the price at the end of 2017.
Since Gelsinger was named as the new CEO on January 13, though, the shares rallied to the low $60s. And then, as Gelsinger outlined his plans on Tuesday, afterhours traders drove the price above $67, representing an $18 billion gain in Intel’s stock market value. That would be the highest closing price for the stock since the Internet bubble if it holds up in today’s trading.
It’s a tremendous vote of confidence in a CEO who is just starting his tenure, particularly in an industry where new products take years to bring to market and turnarounds are fraught with risk. This morning, cooler heads seem to be assessing the plans and Intel’s stock is up only about 4% to around $66.
On the other hand, as they say, sometimes it’s better to be lucky than good, and Gelsinger has inherited a few fortuitous situations he had nothing to do with. Star chip designer Jim Keller spent a few years at Intel working his magic before departing last June. Now Gelsinger has all those designs in his back pocket. The COVID-19 pandemic gave a massive boost to the entire PC business, helping cover the fact that Intel was losing market share to AMD and Nvidia. And the semiconductor shortage has convinced everyone from President Biden on down that the U.S. government ought to lend the semiconductor industry a helping hand, which could lower the bill for Intel shareholders as Gelsinger builds new factories.
Gelsinger doesn’t sound anything like his mentor, famed Intel CEO Andy Grove, who had a thick Hungarian accent, a gruffer, more aggressive speaking style, and wrote a book called Only the Paranoid Survive. “This is a stunning place,” says Gelsinger, explaining his more boyish exuberance. “We’re bringing the geek back, the execution back, and the Grovian culture needs to be revived.”
It doesn’t sound paranoid, but it does sound smart. The next battle in the chip wars will be fascinating.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com
NEWSWORTHY
Return of the Selip. Speaking of rehiring departed execs, Amazon followed the Intel playbook and brought back Adam Selipsky, the current CEO of Tableau, to run its entire cloud business once Andy Jassy takes over as Amazon CEO in a few months. Selipsky spent over a decade at Amazon before leaving in 2016. In more regal hiring news, Prince Harry, the Duke of Sussex, is joining the tech industry. San Francisco-based online coaching service BetterUp named the prince as its new chief impact officer.
Screenless. On the subject of new CEOs trying to make cultural changes, new Citigroup boss Jane Fraser is forbidding her banking minions from scheduling internal video meetings on the last day of the work week. Fraser declared "Zoom-Free Fridays" at Citi henceforth, according to a memo obtained by Bloomberg. Over at cross-town rival Goldman Sachs, where they apparently can make the first year analysts Zoom at 3am on Saturdays if they want, comes some good news. The New York State Department of Financial Services concluded that Goldman did not discriminate in making credit decisions for Apple's credit card. So buy all the new iMacs and iPads you want, folks.
Everyday I wake up and I make money for myself. Whatever you thought of Robinhood CEO Vlad Tenev's appearance before Congress last month, it was apparently good enough to assuage investors. Robinhood said on Tuesday that it filed to go public. No details yet but the debut should smash the company's $12 billion valuation when it raised money last fall and deliver a quick windfall to the funds that helped Robinhood weather the gamestonks storm in January. Elsewhere on Wall Street, Adobe reported a 26% increase in first quarter revenue to almost $4 billion. Analysts expected under $3.8 billion. Its shares, up 50% over the past year, gained 1% in premarket trading on Wednesday.
Super downsize me. Once considered a leading light in the future of journalism, Ev William's website Medium is reversing course and making cuts. All editorial staff were offered buyouts, and budgets for the company's various in-house publications like Elemental and OneZero will be reduced. "The bet was that we could develop these brands," Williams told the New York Times. "What’s happened, though, is the Medium subscriber base has continued to grow, while our publications’ audiences haven’t.” Over at Verizon, the telecom giant announced a subscription media offering from the guts of its AOL and Yahoo acquisitions that will be called Yahoo Plus. I have lost track of the various business models Yahoo has tried over the years (I worked there from 2013-2016) but this seems like a tough ask.
Speaking your truth. The mess at conservative social media service Parler continues to get messier. Cofounder John Matze filed a lawsuit on Tuesday claiming he was wrongfully ousted as CEO and charging financial backer Rebekah Mercer didn't want the site to moderate extremist views.
KPI conundrum. Lots of Data Sheet readers wrote in after Monday's essay about out of touch bosses and remote work. And one, MIT Sloan school research fellow Michael Schrage, had some followup to offer. His article "Rethinking Performance Management for Post-Pandemic Success" offers concrete ideas for improving management of remote and hybrid workforces.
FOOD FOR THOUGHT
Lots of people learn how to cook without ever wanting to become professional chefs. Author and raconteur Robin Sloan argues we should think the same way about computer programming. He's crafted a personal messaging app just for a few family members and suggests we all do something similar.
People don’t only learn to cook so they can become chefs. Some do! But far more people learn to cook so they can eat better, or more affordably, or in a specific way. Or because they want to carry on a tradition. Sometimes they learn just because they’re bored! Or even because—get this—they love spending time with the person who’s teaching them.
The list of reasons to “learn to cook” overflows, and only a handful have anything to do with the marketplace. This feels natural; anyone who has ever, like… eaten a meal… of any kind… recognizes that cooking is marbled deeply into domesticity and comfort, nerdiness and curiosity, health and love.
Well, it’s the 21st century now, and I suspect that many of the people you love are waiting inside the pocket computer you are never long without, so I will gently suggest that perhaps coding might be marbled the same way.
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BEFORE YOU GO
Have you been following the insane case of the mysterious shrimp tails that got into a box of Cinnamon Toast cereal? Kind of hilarious, kind of gross. The New York Times has the scoop. And my Fortune Anne Sraders colleague points out it's also a rapidly developing Twitter recipe (???). You've made it to hump day, so lay off the sugary snacks, I guess.
