YAMD ETF: A Dividend Boost and Value Play in Tech's Next Growth Phase

The AMD Yield Shares Purpose ETF (YAMD) recently announced a 25% increase in its monthly dividend, raising payouts from CAD 0.20 to CAD 0.25 per share as of June 2025. This move underscores the fund's growing appeal as a yield-focused vehicle for investors looking to capitalize on Advanced Micro Devices' (AMD) ascent in AI and high-performance computing. Let's dissect why YAMD's dividend hike, coupled with its alignment to GuruFocus' bullish valuation and Wall Street's targets, positions it as a compelling income-growth hybrid play.

The Dividend Surge: A Vote of Confidence in AMD's Momentum

The jump from CAD 0.20 to CAD 0.25 marks YAMD's first significant dividend increase since its launch, reflecting stronger cash flows or yield strategies from its underlying holdings. YAMD tracks a portfolio of companies closely tied to AMD's ecosystem, including semiconductor giants and cloud infrastructure players. The June 26 ex-distribution date and July 3 payable date ensure investors who hold before the deadline capture this higher payout.

This increase is no small feat. A 25% dividend boost in a single month signals confidence in AMD's ability to sustain growth amid rising demand for its AI chips and data center solutions. For context, peers like NVIDIA's linked ETF (YNVD) maintained a flat CAD 0.75 dividend, while Broadcom's ETF (YAVG) even trimmed its payout. YAMD's move stands out as a bold bet on AMD's leadership in the AI race.

GuruFocus GF Value: AMD's $162.68 Target Signals Undervaluation

While YAMD's GF Value isn't explicitly stated in recent analyses, its parent company AMD carries a GuruFocus valuation of $162.68, implying a 91% upside from its current price of ~$85. This projection factors in AMD's dominance in GPU and CPU markets, its share of the $200B AI hardware opportunity, and its ability to outpace competitors like Intel.

The GF Value calculation aligns with Wall Street's $141.22 average target for AMD stock, though this still leaves room for further upside. The gap suggests YAMD investors could benefit doubly: from dividend growth and potential capital appreciation if AMD's stock approaches these valuation levels.

Why YAMD Outperforms Direct AMD Stock Ownership

While AMD stock is undeniably a core holding for tech investors, YAMD offers two key advantages:
1. Enhanced Yield: YAMD's CAD 0.25/month dividend equates to a ~3.5% annual yield (based on its current price of ~$139), far exceeding AMD's standalone dividend yield of <1%.
2. Diversification: The ETF's broader portfolio reduces single-stock risk, incorporating companies like Xilinx (AMD's subsidiary), cloud providers, and AI software firms that amplify AMD's core strengths.

Moreover, YAMD's structure leverages covered calls and puts to boost returns—a strategy that's proven effective in volatile markets. This contrasts with pure-play AMD stock, which carries direct exposure to semiconductor sector swings.

Risks and Considerations

• ETF Leverage: YAMD uses borrowing and derivatives, amplifying gains but also losses during downturns.
• AMD Dependency: The ETF's performance is tightly linked to AMD's stock, making it vulnerable to semiconductor demand shifts or supply chain hiccups.
• Valuation Risks: GuruFocus' $162.68 target assumes AMD can maintain its AI-driven growth; if competition intensifies (e.g., NVIDIA's H100 dominance), this could lag.

The Bottom Line: A Strategic Entry Point

For income-focused investors, YAMD's dividend boost makes it a standout in a low-yield world. Pairing this with AMD's undervalued GF score and Wall Street's bullish targets creates a compelling case for a buy-and-hold strategy.

Actionable Advice:
1. Buy Before June 26: Secure the CAD 0.25 dividend by holding YAMD ahead of its ex-date.
2. Set a Watch on $140: A dip below this level could signal a better entry point, especially if AMD's stock price converges toward its GF Value.
3. Monitor AMD's AI Earnings: Strong quarterly results in Q3 2025 (due Aug 2025) will be a key catalyst for both YAMD and AMD stock.

In a market hungry for yield and growth, YAMD's blend of dividends and exposure to AMD's AI-driven renaissance makes it a must-watch ETF for 2025.

Disclaimer: Past performance ≠ future results. Consult a financial advisor before making investment decisions.