Change can sometimes be a good thing.
Krzanich's resignation over the discovery of a past consensual relationship with an employee leaves a gaping leadership void at the company, and likely a lengthy road ahead in finding a successor.
"Obviously a seat like Intel CEO will attract many external candidates, but this seems a particularly tough time for additional leadership/culture churn at Intel," wrote Cowen analyst Matthew Ramsey in a note.
As Intel struggles with manufacturing delays for its 10nm chips, competition from (AMD) and Nvidia (NVDA) , and uncertain returns in newer markets like automotive, the departure is untimely to say the least.
At the same time, there are glimmers of optimism that a leadership shake-up at the company could force a culture change at Intel, helping them to better compete with nimble rivals like Nvidia.
"New management will continue to wrestle with the same broad issues, namely how to continue to push advantages in a world where they can no longer count on Moore's Law leadership, how to handle renewed competition, how to thrive in an increasingly heterogeneous world that appears to be moving away from x86, and how to not continue missing the "'next big thing.'" wrote Bernstein analyst Stacy Rasgon.
On Friday, Intel shares rose 0.6% after falling 2.4% on Thursday on news of Krzanich's departure. Nvidia shares, meanwhile, fell 2.4% on Friday but are still up 30% for the year, compared to Intel's 14% rise year to date.
In five years as CEO, Krzanich ushered in an era of growing revenue and widening margins in its core businesses, analysts noted. But he's also blamed for squandering advantages in data center processing and missing the boat on AI and machine learning, which have allowed rivals AMD and Nvidia to gain ground: Krzanich himself said in June that AMD could capture as much as 15% of the server market. And as NVIDIA has successful evolved from a dominant graphics card provider to an AI-first business serving new markets like autonomous cars, Intel is left to play catch-up.
With CFO Bob Swan now holding down the fort as interim CEO, Intel said this week that they will review both internal and external candidates for the CEO job. Internal candidates may include Murthy Renduchintala, Intel's engineering chief, whom Krzanich hired from Qualcomm (QCOM) in 2015 and considered a highly influential leader in the processing world. And unlike Krzanich, who spent 35 years at the company, Renduchintala may be more likely to bring a fresh approach at the helm of the legacy chipmaker.
Either way, finding a success won't happen overnight. "This is the single most important decision they can make, and six to seven months on the short end wouldn't be unheard of," estimated CEO placement specialist Andy Challenger.
Whomever winds up taking the reins at Intel has a tall order -- stop the bleeding in process leadership, and fight hard and wisely in multifaceted markets that no longer revolve around PCs.
But even in the midst of a leadership change, Intel appears to be steeling for battle.
In May, Nvidia boasted of having the world's highest-performing chips trained on a popular AI algorithm, ResNet-50. But Intel is carving out its own path in AI-centric computing, including acquisitions like its $400 million purchase of AI startup Nervana. (Nervana's CEO was soon after promoted to run a new AI product division at Intel.) And it's acquired other key talent like Raja Kudori, once a star architect at AMD, to work on graphics processors.
Intel's sheer size could be an advantage in competing against smaller Nvidia. But for a large company that needs to move quickly, the sudden CEO search certainly won't help matters.
"This ship won't steer quickly, whoever is running it," Rasgon added.