Advanced Micro Devices Inc. (AMD) said that it plans to buy back $4 billion of its outstanding common stock using the cash generated from operations, its first repurchase authorization since 2001, underscoring the chipmaker’s confidence in the future of its business.
The program, equal to about 4% of AMD’s market value, has no termination date, the company announced on Wednesday.
“Today’s announcement reflects our confidence in AMD’s business and the successful execution of our multi-year growth strategy,” Dr Lisa Su, AMD’s president, and CEO, said in a press release.
“Our strong financial results and growing cash generation enable us to invest in the business and begin returning capital to our shareholders,” she added.
The bullish news for AMD shareholders comes just over a week after Citi analysts said going ahead, both Intel and AMD will feel the sting of a PC downturn.
Analyst Christopher Danley reiterated his “neutral” rating for Intel and “sell” rating for AMD in a note to clients, noting that April PC shipments were “well below expectations,” falling 13% month-over-month.
According to Microsoft News, Danley said it was the “first negative data point in the PC food chain since Jan. 2020.”
When Su was named CEO in 2014, the company’s market value was around $2 billion, now it has surged to more than $90 billion. Su has shaken up the computer processor maker, returning it to profitability by delivering new products that are taking market share from Intel Corp.
AMD’s stock rose 2.8% at $76.49 at 1:18 p.m. in New York, on Wednesday, according to Bloomberg. The shares have seen a decline of about 16% this year, following three consecutive years with gains of more than 70%. The company said it repurchased $77 million of stock in its previous buyback plan two decades ago.
