This tech giant’s long-awaited turnaround could be coming…

From the desk of Miles Everson:

Hi!

I’m thrilled to share another business insight with you in today’s edition of  “Return Driven Strategy (RDS).”

For those of you who are not yet familiar with this, RDS is a pyramid-shaped framework with 11 tenets and 3 foundations. When applied properly, these principles help businesses attain high levels of performance.

Today, let’s apply this framework in the context of a specific company.

Continue reading below to find out how this company, once synonymous with innovation and market dominance, is attempting to make a comeback.

This tech giant’s long-awaited turnaround could be coming…

Intel, a company that was once a market leader in the semiconductor industry, now finds itself in a tumultuous period in its 56-year history.

The company rose to prominence through the design and sale of powerful microprocessors that powered countless devices such as personal computers (PCs).

Intel also solidified its position in the tech space by running a semiconductor manufacturing business.

However, declining revenue, sales, and missed opportunities to capitalize on the artificial intelligence (AI) boom have negatively impacted the tech giant’s financial prospects.

Once considered a juggernaut, Intel’s fortunes have waned throughout the years as it has spent the past decade watching competitors like  Advanced Micro Devices (AMD)  and  NVIDIA  dominate the semiconductor industry and AI sector.

To make things worse, Intel’s decline over the past 12 months has been dramatic.

Following a net USD 1.6 billion loss in Q2 2024, the company announced that it was laying off 15,000 employees as part of its USD 10 billion cost reduction plan. Additionally, Intel also revealed plans to transform its ailing chip manufacturing business into an independent subsidiary.

What’s worse?

As of 2024, Intel is only worth approximately USD 100 billion—a sharp decline from its 2023 valuation of USD 211 billion.

Despite these troubling pieces of news, a major shift for the company may already be underway.

A Declining Company On the Verge of A Turnaround

In April 2025, Intel announced the sale of its 51% stake in its  Altera  business to  Silver Lake, an investment firm specializing in tech investing.

Altera is a manufacturer of programmable logic devices founded in 1983 and acquired by Intel in 2015.

According to my friend and colleague,  Professor Joel Litman , Intel’s sale of Altera signals a possible breakup or restructuring of the company.

Why?

This is because it is more than just a move to raise cash; it’s an indicator that Intel is willing to shed noncore assets and potentially unlock value through spinoffs or strategic partnerships.

Intel has been under pressure to streamline its structure in light of its failure to capitalize on the AI boom and its inability to deliver chipmaking innovations.

While Altera was acquired for just under 9 billion—almost half of what Intel paid a decade ago—the sale is still a crucial step toward rebuilding investor confidence as it enables Intel to focus on parts of its business with real upside. More importantly, the deal can help lighten the company’s USD 50 billion debt load.

When news of the Altera deal reached investors, Intel’s stock soared by 16%. Surges like this one are rare for a mature tech giant and indicate how much investors have already written off the company’s prospects.

Simply said, investors have been punishing Intel for years of missed expectations and its failure to take advantage of megatrends like the AI boom.

While the Altera deal isn’t a gamechanging move, it’s a sign that Intel and its new management team are making structural changes that could finally right the ship.

Professor Litman says that expectations for the company are so low that any strategic progress could lead to meaningful upside.

Even though he and his team have been bearish on Intel and have yet to remain convinced of its turnaround, they’re finally seeing some signs of life from the once-dominant tech firm.

… and if the company can free up capital, reduce complexity, and reallocate resources towards AI and advanced packaging, the market could very well change its mind about Intel.

Intel’s Downfall and Potential Turnaround Through the Lens of RDS

Intel’s decline and attempted turnaround is best explained through RDS’ third tenet— target and dominate markets.

As Professor Litman and  Dr. Mark L. Frigo  emphasized in the book,  “Driven,”  businesses succeed when managers are able to identify which industries to allocate resources to and ones they ought not to.

In the context of Intel, it enjoyed a sizable lead in the semiconductor, and by extension, tech space, during its heyday because it allocated its resources into sectors and subsectors that enabled it to maintain its dominance.

Unfortunately, the company was eventually leapfrogged by competitors not only due to stiff competition, but also due to failure to capitalize on the next big trend: AI.

While Intel was on a slow but steady decline, NVIDIA was making sizable investments in AI.

By the time ChatGPT rolled around and generative AI became mainstream, it was all but too late for Intel to capitalize because NVIDIA had already positioned itself to dominate the sector by building the chips needed to power AI systems.

As a chipmaker, Intel could have very well been in the same position as NVIDIA… had its management team allocated its resources into the right places.

It’s not too late for Intel, though, as long as it can reallocate its resources into high-growth areas.

The bottom line?

A company that can pour its resources into the right places  can  and  will  attain high levels of performance despite stiff competition from rivals and sudden shifts.

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If you’re looking to gain a better understanding of Return Driven Strategy and Career Driven Strategy, we highly recommend checking out  “Driven”  by Professor Litman and Dr. Frigo.

Click  here  to get your copy and learn how this framework can help you in your business strategies and ultimately, in ethically maximizing wealth for your firm.

Hope you found this week’s insights interesting and helpful.

Stay tuned for next Tuesday’s Return Driven Strategy!

Most disasters don’t begin with explosions.

Learn more about  the power of process mapping in modern businesses  in next week’s article!