Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD) shares were up 5.1% in early trading on Wednesday after the chipmaker unveiled a new $6 billion share repurchase program, expanding its total buyback authorization to about $10 billion.
The announcement comes as a number of semiconductor firms seek to return capital to shareholders amid signs of cooling investor enthusiasm for the artificial intelligence boom that has driven up valuations across the sector.
The buyback plan follows AMD’s Tuesday announcement of a $10 billion collaboration with AI startup Humain, marking the latest in a string of partnerships between US tech firms and AI ventures in the Middle East.
While AMD has been viewed as one of the strongest challengers to Nvidia’s dominance in the AI chip market, it has struggled to keep pace with rivals. The company's shares declined 18% in 2023, underperforming both Nvidia — whose stock surged more than 170% — and Broadcom, whose custom AI chip business helped double its share price this year.
“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,” chief executive Lisa Su said in a statement.
AMD's announcement comes amid growing scrutiny of AI-related spending and ongoing concerns over the global trade environment, which have weighed on the broader chip sector. Despite that, the Philadelphia Semiconductor Index rose nearly 20% in 2024.