Advanced Micro Devices increased this week after the CPU giant revealed it was going to buy up to $4 billion of its own stock. Shares of the company ended up 2.4% higher at $76.23 shortly after the announcement.
AMD said they will pay for the repurchases through the money generated from operations “which has been increased by the firm’s strong results.”
The company will repurchase stocks in the market. AMD revealed the repurchase program has no ending date and might be suspended at any time.
“Today’s news reflects AMD’s confidence in our multi-year growth plan,” CEO Lisa Su said in a statement. “Our great financial results and increasing cash generation allows us to invest in the company and start returning capital to our shareholders.”
AMD gave modestly better-than-expected Q1 earnings last month and predicted solid short-term sales as increasing chip demand and better pricing during the semiconductor shortage.
Revenues went up by 92.7% to $3.45 billion, beating analysts’ predictions of a $3.2 billion while gross margins were marked at 46%, but 1 basis point higher from Q4 thanks partly because of “a larger mix of Ryzen and EPYC processor sales.”
In April, the company’s $35 billion deal to buy Xilinx was approved by both companies. The deal is expected to close later this year, subject to government clearances.