Pat Gelsinger Steps Down As Intel CEO, Black Friday Boost, Trump Throws BRICs on Tariffs 12/2/24

Jim Cramer (0:00)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (0:07)

Good Monday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Pretty steady open as we kick off trading for the month of December, coming off the best month of the year so far. A lot of news this morning in autos, semis, media, tech, and of course, retail. Our road map is going to begin with that shake up at Intel. Pat Gelsinger is out three years after taking the helm, with those hopes of a turnaround.

David Faber (0:31)

Plus, we continue to be on record watch for Wall Street and retail. Stocks are coming off the best month of the year. Shoppers log in nearly 11 billion in online spending, that to kick off the holiday season. And Trump's new tariff threat, the president-elect calling for a 100% tariff on the so-called brick nations, that is, if they were to act to undermine the US dollar.

Carl Quintanilla (0:56)

Let's begin with a shake up at Intel, which has of course, lagged chip rivals such as NVIDIA when it comes to AI. The company says Pat Gelsinger has retired and is stepping down from the board. Senior leaders David Zinsner and Michelle Johnston-Holthaus have been named the interim co-CEOs, while the board of directors conducts a search for a permanent chief executive. Jim, one of those retirements that's effective immediately.

Jim Cramer (1:18)

Yeah, look, 63 obviously didn't see it coming. Maybe go down as the man who destroyed the most value of anyone I can recall. Maybe we have some others of legitimate companies.

David Faber (1:31)

I think he was, there were others in the history even of Intel that made decisions that said-

Jim Cramer (1:36)

That's true, salespeople had taken over previously.

David Faber (1:38)

Yes, Alina, yeah, the decision not to go after Apple's business, for example, may have been a poor one.

Jim Cramer (1:43)

Decision to not go into high-speed chips, by the way, which was made by Andy Grove.

Andy Grove being the most revered CEO of his era but did miss entirely the graphics processing unit because he felt that all that mattered was the CPU. They're very bad, but that's far and away the longer term. The shorter term is that Pat Gelsinger was over his head, didn't know what he's doing, giant projects. What? No, he was terrific. What do you want me to say? I said he's a nice guy. I said the stock had bottomed. You know why the stock bottomed? Because someone's out.

David Faber (2:16)

You were very critical of him throughout much of his tenure.

Jim Cramer (2:20)

I want to play a...

David Faber (2:21)

Until very recently, when you become more positive. But I don't want to get into the hole where the stock's going.

Jim Cramer (2:26)

Right. Let's focus on what? Moore's Law? No.

David Faber (2:28)

Your point was the right one, which is I think that he embarked on huge capital plans that required enormous capital expenditure over long periods of time. And it's very difficult, I think, to sell a turnaround story, Carl, that it isn't a year or two years. It's dependent on enormous amount of capital spending and could stretch over a five to seven year period. It's just hard to get investors to believe.

Jim Cramer (2:55)

Well, the great thing here is David Zinsner. David Zinsner sees in hand CFO. This was a balance sheet issue. They needed a better balance sheet because they spent so much. And Zinsner will be restoring some of the luster of the balance sheet, which is in tatters, just so everybody knows.

Carl Quintanilla (3:12)

Although on an interim basis, is that who you want to see in the role for your office?

Jim Cramer (3:15)

No, I just need to see someone who knows the difference between a stock and a bond. I think that Gelsinger did have big ideas. I think you needed to have big ideas, but you needed to have a balance sheet, which used to be pristine, by the way, and was unbelievably the envy of tech.

David Faber (3:34)

Yeah. Well, not anymore.

Jim Cramer (3:35)

Not anymore.

David Faber (3:36)

And it's not as though the road ahead is an easy one for this company, in no way, shape, or form is that the case, having, of course, lost its leadership and chips some time back. But those, by the way, who want to think, well, is there an activist here? I'm hearing no. Does this in some way mean that a deal with Qualcomm could conceivably start to bubble up in a more significant way? No. This was about underperformance, trying to get some confidence back amongst an investor base that long abandoned this company, and seeing what they can do. Meanwhile, they're going to initiate a search. I mean, it's not as though this solves their problems.