Ai chipmaker AMD has announced a new $6 billion stock buyback program, increasing its total share repurchase authorization to around $10 billion. This move aligns AMD with other semiconductor companies aiming to reduce their share float amid signs that the AI-driven surge in chip stocks is slowing down. Following the announcement, AMD’s shares rose by as much as 6.4%, although the stock has declined over 6% year-to-date, underperforming the Philadelphia Semiconductor Index, which is down less than 1% this year.
This buyback authorization comes just a day after AMD revealed a $10 billion collaboration deal with Humain, marking its entry into a growing trend of U.S. tech firms forging AI partnerships in the Middle East. Despite the broader chip sector facing pressure from concerns over AI-related spending and global trade tensions, AMD has lagged behind some of its peers. Its shares dropped 18% last year, in contrast to Nvidia, which saw its stock soar over 170%, and Broadcom, whose shares doubled in 2024. The Philadelphia Semiconductor Index has also gained nearly 20% over the same period.
AMD has long been seen as the main competitor to Nvidia in the AI chip market, but it now faces increasing challenges from custom AI processors and Nvidia’s entrenched market dominance. These competitive pressures have raised concerns about AMD’s position in the AI space. Additionally, AMD’s free cash flow declined by more than 33% to $727 million in the first quarter, with cash and cash equivalents at $6.05 billion against current liabilities of $7.7 billion as of March 29, 2025.
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CEO Lisa Su emphasized that the expanded buyback program reflects the board’s confidence in AMD’s strategic direction, growth prospects, and ability to generate strong free cash flow consistently. She reiterated AMD’s commitment to disciplined capital allocation, balancing investment in its product portfolio with returning capital to shareholders.
AMD stock buyback program is part of a broader industry trend where major Ai chipmaker like Broadcom and Qualcomm have also announced large repurchase plans ($10 billion and $15 billion respectively), signaling confidence in their long-term growth despite near-term market volatility. AMD’s recent revenue growth of 21.7% over the last year and its solid financial health, including a strong current ratio and low debt-to-equity ratio, support its ability to sustain such capital return initiatives.
In summary, AMD new $6 billion buyback plan aims to bolster shareholder value amid a challenging AI chip market landscape, reflecting both confidence in its strategic path and recognition of competitive pressures from industry leaders.
