Advanced Micro Devices (AMD) announced a US$6 billion share repurchase program on May 14, 2025.

This increases the company’s total share buyback authorization to approximately US$10 billion.

The Santa Clara-based chip designer confirmed that the buyback program does not have a set expiration date.

Following the announcement, shares of AMD rose by as much as 6.4% during premarket trading.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ AMD’s shareholder return strategy diverges from semiconductor peers amid industry transformation

AMD’s expanded $10 billion buyback program highlights a distinct capital return approach compared to its semiconductor competitors during a pivotal industry shift toward AI.

While AMD focuses exclusively on share repurchases with no dividend payments, competitor Nvidia recently announced a much larger $50 billion buyback program while simultaneously increasing its quarterly dividend by 150% 1.

This strategic difference is especially notable when contrasted with Intel, which suspended its dividend entirely last year amid financial struggles and a 60% stock decline over three years 2.

AMD’s approach reflects its middle position in the semiconductor hierarchy, generating strong enough cash flow to return capital (Q1 2025 net income up 476% to $709 million), but still prioritizing flexibility as it invests in growth opportunities like its ZT Systems acquisition to target the $500 billion AI accelerator market 34.

The semiconductor industry’s financial strategies reveal each company’s perception of its growth runway, with AMD’s expanded buyback signaling confidence while maintaining flexibility for strategic investments.

2️⃣ Tech buybacks face increasing scrutiny over timing and opportunity costs

AMD’s buyback expansion comes amid growing debate about the strategic wisdom of large share repurchase programs in the technology sector.

Historical data shows companies often execute buybacks when stock prices are already elevated, potentially delivering less value to shareholders—a pattern particularly concerning as AMD’s shares were up over 4,000% in the past decade before a recent 40% pullback 35.

Critics of aggressive buybacks argue they can redirect capital away from R&D and strategic investments, with research linking high buyback spending to reduced investment in innovation—a crucial consideration in the competitive semiconductor space where AMD must continue investing heavily to compete with Nvidia in AI acceleration 67.

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