AMD shares surge after record $4.75 billion bond sale

Advanced Micro Devices ↗ 6.50% priced the largest bond offering in its history last week — a $4.75 billion package of senior unsecured notes — sending its shares up 6.5% on Friday to close at $514.39. The deal, which is expected to settle on Monday, August 17, underscores the scale of capital now flowing into AI infrastructure buildouts across the semiconductor industry.

The Deal

AMD launched the four-tranche offering on Thursday, August 13, with pricing that tightened as investor demand exceeded expectations. According to Bloomberg, the longest-dated tranche priced at 90 basis points over U.S. Treasuries, roughly 25 basis points tighter than initial guidance. The tranches break down as $1.25 billion due 2029 at a 4.6% coupon, $1.5 billion due 2031 at 5%, $1 billion due 2033 at 5.25%, and $1 billion due 2036 at 5.5%. The annual interest cost totals approximately $240 million.igorslab+2

Reuters reported that Bank of America ↗ 0.62%, JPMorgan ↘ 0.07%, Barclays ↗ 0.18%, and Wells Fargo ↗ 0.81% led the sale. AMD's SEC filing states proceeds will be used for "general corporate purposes, which may include the repayment of debt." The company has $875 million of bonds maturing next month.tomshardware+3

Why Now

The offering is more than triple AMD's previous bond sale of $1.5 billion in March 2025. AMD ended June with $13.1 billion in cash and short-term investments against $3.2 billion of existing debt, meaning this was not a distressed raise. But the company's capital commitments are growing rapidly. It had $12.2 billion of unconditional commitments at year-end, with about $8.5 billion due during 2026. In July, AMD agreed to invest up to $5 billion in Anthropic alongside a partnership to deploy its Instinct MI450 chips.ts2+3

The timing follows record second-quarter results: revenue of $11.54 billion, up 50% year over year, with data-center sales more than doubling to $6.72 billion. CEO Lisa Su guided third-quarter revenue to approximately $13 billion, above the $12.52 billion analyst consensus.ts2

Market Reaction

Investors rewarded the decision to fund expansion with debt rather than dilutive equity. AMD shares gained 6.4% for the week, far outpacing the Nasdaq Composite's 0.1% weekly rise. On Thursday, Bernstein analyst Stacy Rasgon raised his price target to $650 from $525, while Bank of America's Vivek Arya maintained a Buy rating. The consensus among 52 analysts surveyed as of August 11 was Strong Buy, with an average target of roughly $597 — about 16% above Friday's close.ts2

The stock remains 12% below its 52-week high. Monday's bond settlement will be the next test of whether the tight spreads hold and whether AMD can deploy the capital at returns exceeding its new borrowing costs.