Intel facing tough time, CEO quotes Bible on Twitter

After Intel's shares plunged to the lowest in 50 years, the company's CEO Pat Gelsinger, shared his weekly quote from the Bible, this time about keeping the eye on the road.

In Short

•     Intel shares hit lowest in 50 years

•     15 per cent workforce layoffs announced

•     CEO quotes Bible amid crisis

Things are not going well for Intel. On Friday, Intel’s shares plunged to the lowest in 50 years. Intel reported a significant earnings shortfall for the June quarter. So much so that the company said it will have to lay off 15 per cent of its workforce. Amid all that, Intel CEO Pat Gelsinger has shared a post on erstwhile Twitter quoting the Bible. His post reads: “Let your eyes look straight ahead; fix your gaze directly before you. Give careful thought to the paths for your feet and be steadfast in all your ways” Proverbs 4:25-26.

Several people have responded to the tweet. Some say Gelsinger is “resorting to religion to save the company”, another jokingly says “Bro’s shares are down so bad he’s praying”. However, people on X missed that Pat Gelsinger shares similar Bible quotes on a weekly basis.

Meanwhile, Chamath Palihapitiya, CEO of Social Capital, also responded to Gelsinger's post and offered a critical perspective on Intel's current strategy while acknowledging its historic contributions to the tech industry. He recognises Intel's pivotal role in transforming technology throughout the 80s, 90s, and 00s, calling it a "wild ride."

However, Palihapitiya suggests that Intel needs to rethink its current direction. He observes that instead of advancing up the value chain by creating innovative intellectual property (IP) and collaborating with low-margin contract manufacturers (CMs), Intel appears to be descending into the lower market segments, effectively becoming a CM itself. This shift, he argues, is problematic without the development of next-generation IP to support a vertically integrated, non-China dependent solution—a narrative the market might appreciate.

Palihapitiya warns that without such IP innovation, Intel risks becoming a capital-intensive company focused on low-margin manufacturing for others. To counter this, he recommends leveraging Intel's balance sheet more aggressively to acquire cutting-edge IP in fields like memory, batteries, and machine learning ASICs. He suggests that Intel could become a dominant acquirer of innovative technologies, enhancing its portfolio and either integrating these innovations into its CM operations or using them internally before spinning off the CM division.

This approach, Palihapitiya believes, could result in an IP and CM arm that are greater than the sum of their parts, providing a more sustainable and profitable future for Intel.

Intel's stock experienced a historic plunge on Friday, marking its steepest decline in 50 years and dropping to levels not seen since 2013.

The dramatic fall followed a significant earnings miss and the announcement of a major restructuring plan. The shares tumbled 26 per cent, closing at $21.48. This marked the second worst trading day for Intel since its IPO, surpassed only by a 31 per cent drop in July 1974. Consequently, Intel's market capitalisation has now fallen below $100 billion.

The company's financial performance was disappointing across all metrics. Intel reported a net loss of $1.61 billion, a stark contrast to the net income of $1.48 billion it recorded in the same period the previous year.

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