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Intel (INTC) is jumping sharply higher once again after Reuters reported that the company's new CEO, Lip-Bu Tan, is looking to make significant changes to its manufacturing processes and its AI strategies. The news is further amplifying hopes that Tan can execute a dramatic turnaround at INTC, which saw shares plummet by over 60% during former CEO Pat Gelsinger's tenure. 

• Since INTC announced Mr. Tan as its new CEO, the stock has soared by nearly 25%. That optimism largely rests on Mr. Tan's prior success as CEO at Candence Design Systems (CDNS), where he prioritized investments in new AI/ML technology to create competitive advantages which ultimately led to strong financials and a 15-fold increase in CDNS's stock price during his time as CEO.
• His first order of business at INTC will be to determine the path forward for the struggling and highly unprofitable Foundry segment, which had been a cornerstone of Gelsinger's mission to make INTC the world's second largest chip manufacturer, behind only Taiwan Semiconductor Manufacturing (TSM). With Gelsinger at the helm, however, it's been reported that decision making was too slow and that too many layers of middle-management were impeding INTC's transformation.
• Rather than completely moving away from Gelsinger's IDM 2.0 strategy, which was seemingly recently on the table as INTC considered spinning off or selling the Foundry unit, Tan is looking to make some significant changes to the manufacturing strategy. Initiating another round of layoffs is a possibility, while refocusing on AI server chips -- an area INTC has fallen far behind competitors such as NVIDIA (NVDA) and Arm Holdings (ARM) -- will likely be another key tenet of the turnaround.

INTC is also expected to ramp up its go-to-market strategy for Foundry, becoming more aggressive in its efforts to add new customers. Overall, this new and more sharpened focus is providing some optimism that the worst is now behind INTC and that it's on a clearer path forward.