AMD stock gains after announcing first major share repurchase in its history

That AMD is considering any type of share buyback is itself a milestone — the company has not repurchased any shares since 2001, according to FactSet data, and at that time it only repurchased about $77 million worth of stock. In records dating back to 1980, AMD has spent a total of roughly $100 million on repurchasing stock. That’s unlike other companies in the semiconductor space like Intel Corp. INTC, +0.26%, which just announced a $10 billion buyback plan back in August, along with recently announced buyback programs from the likes of Applied Materials Inc. AMAT, +1.49% and NXP Semiconductors NV NXPI, +1.13%.

“Today’s announcement reflects our confidence in AMD’s business and the successful execution of our multiyear growth strategy,” said Lisa Su, AMD’s chief executive, in a statement. “Our strong financial results and growing cash generation enable us to invest in the business and begin returning capital to our shareholders.”

In 2020, AMD reported free cash flow of $777 million, up from $276 million in 2019, according to FactSet data. Before that, AMD hadn’t reported positive cash flow for a fiscal year since 2011. Additionally, AMD finished 2020 sitting on $2.29 billion in cash and short-term investments, its highest level since 2009, when it reported $2.68 billion.

That’s all built upon a renaissance at AMD under the tutelage of Su. Most recently, AMD has shown strong data-center adoption while Intel has lagged, while aggressively building out its portfolio of products and acquiring chip maker Xilinx Inc. for $35 billion, which shareholders recently approved.

AMD shares closed at an all-time high of $97.25 on Jan. 11, and are down nearly 17% for the year. Over the past 12 months, AMD shares have grown 39%, compared with a 68% rally in the SOX index, a 41% gain on the S&P 500 index SPX, -0.63% and a 45% rise on the tech-heavy Nasdaq Composite Index COMP, -0.43%.