Advanced Micro Devices (AMD) revealed on Wednesday (May 14) a new stock buyback program totaling $6 billion. This move aligns AMD with other chipmakers seeking to decrease their outstanding shares as the rapid growth in their stock values, fueled by artificial intelligence (AI) enthusiasm, shows indications of moderating.
“Our expanded share repurchase program reflects the Board’s confidence in AMD’s strategic direction, growth prospects, and ability to consistently generate strong free cash flow,” said AMD CEO Lisa Su.
“We remain committed to disciplined capital allocation and driving strong shareholder returns, including investing in our leadership product portfolio to drive growth, while returning capital to owners,” she added.
AMD shares gain momentum
Following the announcement, AMD's shares experienced an increase of up to 6.4%. However, the company's stock has declined by over 6% year-to-date, contrasting with a less than 1% decrease in the Philadelphia Semiconductor Index.
The buyback initiative elevates AMD's total repurchase authorisation to approximately $10 billion. This announcement comes a day after AMD disclosed a $10 billion collaboration with Humain, marking its entry into the trend of US technology firms establishing AI partnerships in the Middle East.
Despite broader pressures on the chip sector stemming from concerns about AI-related expenditures and the implications of global trade tensions, AMD's stock performance has lagged behind its competitors. This underperformance is attributed to increasing apprehension regarding AMD's competitive standing within the growing AI market.
While AMD has been recognised as a significant challenger to Nvidia's leading position in AI, the company now faces considerable competition from custom-designed processors and Nvidia's established dominance within the industry.
“Our expanded share repurchase program reflects the Board’s confidence in AMD’s strategic direction, growth prospects, and ability to consistently generate strong free cash flow,” said AMD CEO Lisa Su.
“We remain committed to disciplined capital allocation and driving strong shareholder returns, including investing in our leadership product portfolio to drive growth, while returning capital to owners,” she added.
AMD shares gain momentum
Following the announcement, AMD's shares experienced an increase of up to 6.4%. However, the company's stock has declined by over 6% year-to-date, contrasting with a less than 1% decrease in the Philadelphia Semiconductor Index.
The buyback initiative elevates AMD's total repurchase authorisation to approximately $10 billion. This announcement comes a day after AMD disclosed a $10 billion collaboration with Humain, marking its entry into the trend of US technology firms establishing AI partnerships in the Middle East.
Despite broader pressures on the chip sector stemming from concerns about AI-related expenditures and the implications of global trade tensions, AMD's stock performance has lagged behind its competitors. This underperformance is attributed to increasing apprehension regarding AMD's competitive standing within the growing AI market.
While AMD has been recognised as a significant challenger to Nvidia's leading position in AI, the company now faces considerable competition from custom-designed processors and Nvidia's established dominance within the industry.
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