Intel (INTC -0.69%) is set to begin a new phase of its history amid the sudden retirement of CEO Pat Gelsinger. Gelsinger spent most of his career at Intel. He helped to develop the i486 microprocessor in the 1980s, and Intel co-founder Andrew Grove mentored him before he moved on to other opportunities.

With his past experience, the company's board hoped Gelsinger's return would help restore its former glory. Now that his retirement has dashed those hopes, David Zinsner and Michelle Johnston Holthaus will serve as interim co-CEOs until the company finds a suitable replacement. However, the bigger question for Intel is where Gelsinger's retirement leaves the semiconductor stock and its shareholders.

Gelsinger's retirement

In the end, Gelsinger leaves behind a mixed legacy for Intel. He came back to the company in 2021 as the one-time industry leader had fallen behind rivals such as Advanced Micro Devices and Nvidia. Taiwan Semiconductor (TSMC) also surpassed Intel's manufacturing capabilities.

As CEO, Gelsinger sought to restore Intel's industry lead. He set a path to catch up to rivals by this year and surpass them by 2025. He also wanted Intel to be a leader in the foundry industry, allocating tens of billions of dollars to building the world's most advanced fabs in the U.S. and abroad.

Nonetheless, the emergence of Nvidia's AI accelerators dashed hopes of restoring industry leadership. Moreover, the massive costs of building foundries led to huge financial losses, the suspension of Intel's dividend, and its removal from the Dow 30. These results made Gelsinger's tenure unsuccessful from a shareholder perspective.

Intel after Gelsinger

Gelsinger's departure only adds to the uncertainty. Both interim CEOs have finance backgrounds. Even though they are likely to be in that job temporarily, Intel may need more engineering-oriented leaders to increase its competitiveness.

Furthermore, no matter who becomes Intel's next CEO, the overall direction of its business is in flux. Despite losing its technical edge, Intel's product revenue alone came to almost $36 billion in the first nine months of 2024. Preserving that revenue stream is arguably enough for the company to invest in technical improvements.

Additionally, Intel already made Intel Foundry a separate subsidiary. Its revenue in the first three quarters of 2024 is $13 billion, far below its product revenue. However, Intel is the largest foundry company in the U.S., so it is under tremendous political pressure to catch up with TSMC. That need may push Intel to spin off the foundry business into a separate company.

Also, as mentioned before, Gelsinger's business decisions weighed heavily on financials. The revenue of $39 billion (which includes intersegment elimination) in the first three quarters of 2024 did not grow significantly from last year's levels.

Still, the cost of revenue rose 12% during that time amid rising depreciation costs. Also, around $7 billion in restructuring charges contributed to a staggering $19 billion net loss in the first nine months of 2024. Intel lost less than $1 billion in the same period last year.

Not surprisingly, Intel stock has suffered under these conditions. Nonetheless, Intel's price-to-sales (P/S) ratio of 1.8 is close to multiyear lows. Moreover, its price-to-book value ratio is approximately 1.0. That prices the stock at the value of its assets minus its liabilities, a rock-bottom valuation that gives investors a reason to take a chance on this troubled stock.

Investing in Intel

Until investors learn more about Intel's future direction, they should probably treat its stock as a speculative hold. The instability at the top of the company, the lack of a technical edge, and the uncertain direction of the company will probably keep most investors out of the stock.

However, a 1.0 price-to-book-value ratio likely limits its potential downside. Also, if it can become competitive and fully spin off its foundry business, either one or both parts of that business could eventually bring significant returns to its investors.

As mentioned before, such hopes are probably speculation for now. Until Intel can restore stability and forge a plausible path for growth, investors should expect little from this company.