AMD Shares Soar 8.95% on $6 Billion Buyback, AI Deals

Advanced Micro Devices, Inc. (AMD) shares surged 8.95% intraday, reaching their highest level since January 2025, marking a sixth consecutive day of gains and a 19.37% increase over the past six days.

The strategy of buying AMD shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years. The annualized return was 3.56%, which outperformed the market by 3.56 percentage points. This strategy produced an average annual return of 18.58%, indicating that it was a profitable approach, although it was slightly less aggressive than some other strategies tested. Linde, for instance, delivered an average annual return of 18.58% over the same period, matching this strategy's performance. Therefore, this strategy proved to be a solid choice, suitable for investors seeking steady returns without taking excessive risks.

AMD's recent stock price surge can be attributed to several key developments. The company announced a new $6 billion share repurchase program, adding to the remaining $4 billion from an existing program, totaling approximately $10 billion in repurchase authority. This move underscores the Board's confidence in AMD's strategic direction and growth prospects, aiming to enhance shareholder returns through strong free cash flow generation.

Additionally, Bank of America raised its price target for AMD, citing momentum from AI deals. This positive analyst revision has further bolstered investor confidence in the company's future performance, contributing to the stock's upward trajectory.