Advanced Micro Devices (AMD) rose after the chipmaker said Wednesday it was going to repurchase up to $4 billion of outstanding stock.
Shares of the Santa Clara, Calif. ended up 2.4% at $76.23.
AMD said that it expects to fund repurchases through cash generated from operations "which [has] been strengthened by the company’s strong operational results."
The company will repurchase stock in the open market. AMD said the repurchase program has no termination date and may be suspended or discontinued at any time.
“Today’s announcement reflects our confidence in AMD’s business and the successful execution of our multi-year growth strategy,” Lisa Su, president and CEO said in a statement “Our strong financial results and growing cash generation enable us to invest in the business and begin returning capital to our shareholders.”
AMD posted modestly better-than-expected first-quarter earnings last month and forecast solid near-term sales amid improving chip demand and stronger pricing linked to the global semiconductor shortage.
AMD said non-GAAP earnings for the three months ending in March came in at 45 cents per share, a 150% increase from the same period last year and one penny ahead of Wall Street's consensus forecast of 44 cents per share.
Revenues surged 92.7% to $3.45 billion, again topping analysts' forecasts of a $3.2 billion tally while gross margins were flat at 46%, but 1 basis point up from the fourth quarter thanks in part to "a greater mix of Ryzen, Radeon and EPYC processor sales".
The deal is set to close this year, subject to conditions including regulatory clearances.
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