Advanced Micro Devices (NASDAQ: AMD) stock emerged in mid-April from the stupor it had been in through most of 2024 and at the start of 2025. The last five days of trading have been particularly positive for the semiconductor giant, and, at their press time price of $118.03, AMD shares are up 15.82% within the time frame.
Such a strong rally also significantly increased the semiconductor giant’s short volume ratio, which hit a two-week high of 55.17 on Tuesday, May 13. For comparison, it recorded its previous high on May 6, reaching 48.96 before falling toward a local low of 42.47 two days later.
The previous short volume ratio decline was dictated by AMD stock’s steady upward movements. With the equity soaring 4.95% in the initial hours of the May 14 session, another short squeeze will likely cull the excess bearish bets.
Although the Advanced Micro Devices Wednesday rally is driven by a string of positive developments affecting both the industry and the wider economy in mid-May, its strongest tailwind lies in the latest round of share buybacks.
AMD announces $6 billion share buyback plan
On the morning of May 14, the chipmaker’s board announced it would spend $6 billion on equity buybacks, bringing the 2025 total to approximately $10 billion.
According to AMD CEO Lisa Su, the vast amount allocated reflects the semiconductor giant’s confidence in its business direction and continued ability to generate shareholder returns:
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.
Investors, for their part, tend to react positively to stock repurchase announcements, as they reduce outstanding equity, thus increasing the value of each share.
Buyback bolsters AMD’s positive momentum from earnings and trade war truce
Lastly, the decision came shortly after AMD impressed with its latest earnings report, in which it showcased strong growth and beat both earnings-per-share (EPS) and revenue forecasts.
Furthermore, it has accelerated the positivity that arose from the breakthrough tariff agreement reached between the U.S. and China, which effectively imposed a 90-day truce on the ongoing trade war.
The deal is arguably especially important for semiconductor companies, which have been severely impacted by the advanced artificial intelligence (AI) microchip export restrictions the American administration has imposed.
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