AMD's $6B Buyback And $10B AI Deal: A $16B Gambit to Catch Nvidia

Khac Phu Nguyen

Thu, May 15, 2025, 12:43 PM 1 min read

Advanced Micro Devices (NASDAQ:AMD) is making moves. Recently, the chipmaker announced a caller $6 cardinal banal buyback, pushing its full repurchase firepower to $10 billion. The goal? Shrink stock count, boost EPS, and reconstruct capitalist confidence. AMD's latest $10 cardinal AI collaboration with Humain is simply a bold swing, but questions linger connected however rapidly that stake tin wage off.

• Warning! GuruFocus has detected 4 Warning Signs with AMD.

CEO Lisa Su says the repurchase signals beardown content successful AMD's strategical absorption and semipermanent currency flow. But Q1 escaped currency travel was down implicit 33%to $727 millionand currency connected manus present trails existent liabilities. That doesn't permission a immense borderline for error. Add to that fierce contention from Nvidia's (NASDAQ:NVDA) AI dominance and a question of customized chipmakers, and AMD's runway feels tight. Still, reducing the stock number could assistance enactment up EPSespecially if aboriginal net stabilize oregon rebound.

The bigger picture? The semipermanent illustration shows AMD's EPS without non-recurring items steadily trending up. Despite banal terms swings, net show has been resilient.

If buybacks footwear successful and AI execution improves, the banal could drawback up to the fundamentals. But marque nary mistakethis is present a show-me story.

This nonfiction archetypal appeared connected GuruFocus.