Intel (INTC) stock rallied early Monday on news that CEO Pat Gelsinger has stepped down. But the stock later retreated underlining the market's uncertainty about the chip giant's future in what Gelsinger himself called a "challenging year."

"Today is, of course, bittersweet as this company has been my life for the bulk of my working career," Gelsinger said in a statement. "It has been a challenging year for all of us as we have made tough but necessary decisions to position Intel for the current market dynamics.

Intel Stock: CEO's Bumpy Ride

In fact, Gelsinger's nearly four-year stint as CEO had been a rocky chapter for what was once a dominant technology powerhouse.

Gelsinger, who had served as Intel's first chief technology officer, rejoined Intel as the new boss at a time when the chip giant was grappling with production challenges and stiffening competition with archrivals led by AMD and Nvidia.

Bringing in the Intel veteran was an effort to signal a dramatic turnaround for the semiconductor powerhouse.

"I am thrilled to rejoin and lead Intel forward at this important time for the company, our industry and our nation," Gelsinger said in a January 2021 statement. Referring to Intel's respected early leaders Andy Grove, Robert Noyce and Gordon Moore, Gelsinger said "having begun my career at Intel and learned at the feet of Grove, Noyce and Moore, it's my privilege and honor to return in this leadership capacity.

But Intel continued to struggle under Gelsinger's leadership. AMD (AMD) and Nvidia (NVDA) emerged as the dominant players in artificial intelligence, the fast-growing trend that has upended the tech industry.

Intel's Bold Bet

Intel under Gelsinger also made a bold but controversial move. The company, known for decades for its cutting edge manufacturing technology, decided to set up a separate entity for its foundry business.

"While we can debate whether the company's push into foundry (with all the heavy investments it entails) was the right or wrong decision, it is clear that the core business fundamentals that were supposed to underpin that strategy are much more challenged," Bernstein Research analyst Stacy Rasgon told clients in a Monday note.

IDC President Crawford Del Prete said Gelsinger's exit "demonstrates the complexity of what Pat was attempting, both internally and in the context of the overall market."

Challenges included "Improving process technology/new onshore manufacturing, investing in Foundry Services and making Intel relevant in a tech world being reshaped by AI," he told Investor's Business Daily. "I think in the end, the plan was probably too ambitious given everything on the table."

Intel Stock: Search For New Boss

Intel named two senior executives, Chief Financial Officer David Zinser and Executive Vice President Michelle Johnson Holthaus, as interim co-CEOs.

Meanwhile, the Intel board launched a search for a new CEO.

Gelsinger's retirement caps what had been a long and stellar career in tech. He joined Intel as a teenager and steadily rose through the ranks, becoming the semiconductor company's first chief technology officer. He left Intel in 2009 to serve as chief operating officer and president of EMC and later became CEO of VMware.

"Leading Intel has been the honor of my lifetime — this group of people is among the best and the brightest in the business, and I'm honored to call each and every one a colleague," Gelsinger said.

Intel stock rallied more than 5% when the news broke, but it slipped a fraction to close at 23.93. The shares have shed roughly 50% year to date. Despite Monday's gains, Intel stock is trading well below its 200-day average. Intel has a low Relative Strength rating of 13, according to IBD MarketSurge.

YOU MAY ALSO LIKE

SoundHound Makes Itself Heard On Wall Street With Voice AI

Arista Networks, Palo Alto To Join Nvidia, Broadcom, Super Micro In 2024 Stock Splits