Intel Corp. has replaced chief executive Bob Swan with VMware, Inc. boss Pat Gelsinger in a surprise change. Intel's share price is expected to open Thursday up 0.08% at $57.00 on the Nasdaq. The issue rose by more than 7% after the announcement. The stock closed at $56.95 a share Wednesday.

"This is incredibly important strategically to what Intel is looking to accomplish and be defined more as a technology innovator and operator," executives at wealth management company Bahnsen Group LLC said.

The chipmaker said the move was part of a strategy to get back to its technology roots. Intel is expected to release its fourth quarter earnings next week and will offer more updates on its leadership change and future direction.

Hedge fund Third Point LLC said last year Intel's problems might undermine the U.S. technology industry and encourage it to "consider alternatives" including selling some subsidiaries and splitting its design and manufacturing operations, according to The Wall Street Journal.

Intel said late Wednesday Gelsinger would take over Feb. 15. Gelsinger was previously Intel's chief technology officer before working for VMware. Swan became Intel's chief executive in 2019 after working as its chief financial officer from 2016.

Intel chairperson Omar Ishrak said the decision to go with Gelsinger was made after "careful consideration." He said the company thought it was the right time to make a change in this "critical period of transformation."

Intel has faced several recent setbacks such as share-price losses and technology missteps. Last year, the company lost its title as America's most valuable semiconductor company after it was overtaken by competitor Nvidia Corp.

Intel said it wanted to return to its engineering roots and become again the leading technology innovator in the semiconductor segment. Intel is willing to embrace third-party chipmakers rather than rely on its own facilities.

Intel's products currently lag behind in terms of advancements when compared with products released by competitors. It has been left behind by chip manufacturers such as Taiwan Semiconductor Manufacturing Co. and South Korea's Samsung Electronics Co. in terms of developing the most cutting-edge microchips.