S&P Global Ratings took a critical step on Tuesday by downgrading Intel Corp’s credit rating from ‘BBB+’ to ‘BBB’, citing the company’s slow business recovery and the uncertainty introduced by changes in its management team.
Intel, a name synonymous with the chipmaking industry, has seen its revenue for the first nine months of this year hover almost stagnant at approximately $38.84 billion, which fell short of S&P Global’s expectations.
Adding to the concerns, the recent exit of CEO Pat Gelsinger, who played a pivotal role in driving Intel’s integrated manufacturing strategy, has stirred questions around the execution of the company’s ambitious turnaround plans, according to S&P Global.
Although Intel has repeatedly assured that its business strategy will not deviate significantly, the ratings agency points out that a change in leadership inevitably brings some degree of strategic shifts. This potential for fluctuation could, in turn, create uncertainty regarding when the company might successfully regain its footing.
It’s noteworthy that Gelsinger’s departure precedes the completion of his envisioned four-year roadmap, which aimed to reclaim Intel’s status as the top player in crafting the fastest and most compact computer chips—a title that had been snatched by Taiwan Semiconductor Manufacturing Co.
Despite these challenges, S&P Global has maintained a “stable” outlook on the company. This perspective indicates their belief that Intel is poised for growth, albeit with a gradual recovery anticipated next year.
