Advanced Micro Devices (AMD) announced a new $6 billion stock buyback plan on Wednesday, May 15, 2025, increasing its total repurchase authority to approximately $10 billion. This move aligns AMD with other chipmakers aiming to reduce their float amid signs of a potential slowdown in the AI-driven market that has previously boosted their shares.

Shares of the Santa Clara, California-based company experienced a rise of up to 6.4% following the announcement. However, the company's shares have fallen by more than 6% year-to-date, contrasting with a less than 1% drop in the Philadelphia Semiconductor Index.

The buyback announcement coincided with AMD's recent $10 billion collaboration deal with Humain, mirroring similar AI-related agreements between U.S. technology firms and entities in the Middle East.

Despite the broader chip sector facing pressures related to artificial intelligence spending and global trade war impacts, AMD has underperformed compared to its peers. Concerns have surfaced regarding AMD's competitiveness in the AI market, particularly against custom processors and the established dominance of Nvidia.

In the previous year, AMD's shares decreased by 18%, while Nvidia's shares surged by over 170%. Custom AI chipmaker Broadcom's shares doubled in value during 2024, and the Philadelphia Semiconductor Index rose by nearly 20%.

AMD Chief Executive Lisa Su stated that the 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.

However, AMD's free cash flow for the three months ending in March declined by more than 33% to $727 million. As of March 29, AMD held $6.05 billion in cash and cash equivalents, while its current liabilities amounted to $7.70 billion.

Other major chipmakers, including Broadcom and Qualcomm, have also announced stock buyback programs. Broadcom declared a $10 billion buyback in April, and Qualcomm unveiled a $15 billion stock buyback in November.