Intel employees walk by a sign as they enter their office in Santa Clara, California.

Intel’s market leadership in the semiconductor industry may be at risk, according to Evercore ISI.

The firm lowered its rating to in line from outperform for Intel shares, saying the search for the company's next CEO will add to investor uncertainty.

Last month Intel announced the resignation of its CEO Brian Krzanich for his alleged infraction of the company's nonfraternization policy stemming from a consensual relationship. Krzanich violated the policy that said managers cannot have relationships with people who report to them either directly or indirectly, Intel said. He was replaced on an interim basis by Chief Financial Officer Robert Swan.

“The departure of Brian Krzanich adds additional uncertainty, as it comes at a crucial time for the company. Intel is facing increasing competition from the likes of Nvidia and AMD, and its manufacturing advantages appear to be flagging, with TSMC’s 7nm processes in production,” analyst C.J. Muse said in a note to clients Monday.

Intel shares traded down slightly Tuesday after the report. Its stock is up 13 percent this year through Monday versus the S&P 500's 5 percent return.

Muse reduced his price target to $54 from $64 for Intel shares, representing 4 percent upside to Monday's close.

The analyst also noted Intel’s problems in moving to its next-generation chip manufacturing technology.

The chipmaker revealed on its April 26 earnings conference call that it delayed volume production under its 10-nanometer chip manufacturing process to next year. Conversely, AMD said on its call that it plans to start next-generation 7-nanometer chip production in late 2018.

One nanometer equals one-billionth of a meter. Smaller nanometer chipmaking technologies allow companies to create faster, more power-efficient chips.

“The company’s competitors are not standing still. AMD is in its best position in years, and the AI/compute landscape is changing dramatically with the rise of alternative architectures (NVDA, custom processors, etc.),” he said.

When asked for comment, an Intel spokesperson referred to their previous statement, saying “we remain confident in our products and competitive position.”

Intel is slated to report its second-quarter results on July 26.