AMD. Adding $6 Billion Buyback & Authorizing 78% Increase In Share Count. But Why?

hmm, that's an interesting move....

It’s been a busy week for AMD. First there was the 500MW data centre deal inked in Saudi Arabia on May 13, details here. Then, this morning came the news that the company has found a buyer for the manufacturing arm of ZT Systems, details here.

$3 billion in cash and stock, inclusive of a contingent payment of up to $450 million

AMD retains ZT Systems’ rack-scale AI solutions design and customer enablement expertise to accelerate quality and time-to-deployment for cloud customers

Divestiture and preferred NPI manufacturing partnership with Sanmina consistent with intentions announced at the time of ZT Systems acquisition

This divestiture was of course always AMD’s plan and it comes less than two months after the closing of the ZT Systems acquisition, details here.

In between these events was AMD’s Annual General Meeting held on May 14. Following the AGM, the company announced a new $6 billion share repurchase program, despite still having $4 billion remaining on the previous buyback program, details here.

SANTA CLARA, Calif., May 14, 2025 (GLOBE NEWSWIRE) -- AMD (NASDAQ: AMD) today announced that its board of directors approved a new $6 billion share repurchase program. The new authorization is in addition to the remaining balance, as of March 29, 2025, of approximately $4 billion of its existing share repurchase program, increasing the total current repurchase authority to approximately $10 billion.

According to AMD CEO Lisa Su:

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. We remain committed to disciplined capital allocation and driving strong shareholder returns, including investing in our leadership product portfolio to drive growth, while returning capital to owners.

For the record, AMD has been significantly ramping their share repurchases in 2025. For all of 2024, they repurchased just $862 million worth of shares

During the twelve months ended December 28, 2024, we returned a total of $862 million to shareholders through the repurchase of 5.9 million shares of common stock under our stock repurchase program

In Q125 alone, they repurchased $749 million worth of shares:

During the three months ended March 29, 2025, the Company repurchased 7 million shares of its common stock under the Repurchase Program for $749 million.

This dramatic increase in share repurchases should come as no surprise given the performance of AMD’s share price year-to-date:

Against this backdrop, the new buyback authorization suggests that AMD is gearing up for further repurchases of the order which we saw in the first quarter. That can be seen as either a positive or a negative, depending on your perspective.

The really big news out of the AGM however was the decision to authorize a 78% increase in the company’s share count, from 2.25 billion to 4 billion shares:

Proposal No. 4: Approval of Amendment and Restatement of the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to Increase the Number of Authorized Shares of Common Stock from 2.25 Billion Shares to 4.0 Billion Shares. This proposal was approved.

That’s a bold decision. Now why would AMD want to make this move? Let’s dig in…