Advanced Micro Devices Inc. (NASDAQ:AMD)

The solvency position of the company exhibits a generally stable profile over the analyzed period, with some notable fluctuations in certain metrics, particularly towards the end of the timeframe. Overall, leverage ratios remain relatively low for most of the period, suggesting a conservative capital structure. However, a slight increase in leverage is observed in the most recent quarters.

Debt to Equity Ratios

The debt to equity ratio remained consistently low, fluctuating between 0.03 and 0.05 from March 2022 through December 2023. A noticeable increase to 0.07 is observed in March 2024, followed by a decrease to 0.05 in June 2025, and stabilization at 0.05 by December 2025. The inclusion of operating lease liabilities results in a slightly higher ratio, also showing a similar trend with an increase to 0.08 in March 2024 and stabilization around 0.06.

Debt to Capital Ratios

Similar to the debt to equity ratios, the debt to capital ratios demonstrate stability between 0.03 and 0.05 until March 2024. An increase to 0.07 is then seen in March 2024, followed by a return to 0.05 and stabilization through December 2025. The debt to capital ratio including operating lease liabilities mirrors this pattern, increasing to 0.08 in March 2024 and stabilizing around 0.06.

Debt to Assets Ratios

The debt to assets ratios remain consistently low, ranging from 0.02 to 0.04 for the majority of the period. A slight increase is observed in March 2024, reaching 0.06, before decreasing to 0.04 by December 2025. Including operating lease liabilities, the ratio follows a similar trend, with a peak of 0.07 in March 2024.

Financial Leverage Ratio

The financial leverage ratio exhibits a slight upward trend from 1.21 in March 2022 to 1.26 in September 2025, with some fluctuations. The ratio peaked at 1.24 in September 2022 and again in March 2024, before decreasing slightly to 1.22 in December 2025. This indicates a modest increase in the company’s use of financial leverage over the period.

Interest Coverage Ratio

The interest coverage ratio demonstrates a significant decline from 104.42 in March 2022 to a negative value of -2.15 in July 2023. This suggests a period of difficulty in covering interest expenses. However, the ratio recovers substantially, reaching 32.80 by December 2025, indicating a significant improvement in the company’s ability to meet its interest obligations. The recovery is particularly strong in the latter half of the analyzed period.

In summary, while the company maintained a conservative debt position for much of the analyzed period, recent quarters show a slight increase in leverage ratios. The dramatic decline and subsequent recovery of the interest coverage ratio warrants further investigation, but the most recent values suggest a strengthened ability to service debt.

The debt to equity ratio exhibited a generally stable pattern over the observed period, with a notable increase in the most recent quarters. Initially, the ratio remained low, indicating a conservative capital structure. However, a shift is apparent towards the end of the observation window.

Initial Stability (Mar 26, 2022 – Dec 30, 2023)

From March 26, 2022, through December 30, 2023, the debt to equity ratio fluctuated between 0.03 and 0.05. This suggests a consistent reliance on equity financing relative to debt. Total debt remained relatively stable during this period, while stockholders’ equity experienced modest growth, contributing to the consistent ratio values.

Increase in Leverage (Mar 30, 2024 – Dec 27, 2025)

Beginning with the period ending March 30, 2024, the debt to equity ratio began to increase. A significant jump to 0.07 was observed in March 2024, driven by a substantial increase in total debt to US$4,164 million, while equity remained relatively constant. Subsequent quarters show a slight decrease in debt, but the ratio remains elevated compared to prior periods, settling at 0.05 by December 27, 2025. This indicates a growing reliance on debt financing.

Trend Analysis

The overall trend demonstrates a transition from a low-leverage position to a moderately leveraged position. While the initial periods showed a strong equity base supporting operations, the recent increase in debt suggests a potential shift in financing strategy or a need for capital to fund growth initiatives. The increase in debt, coupled with continued growth in equity, suggests the company is actively deploying capital.

Magnitude of Change

The most substantial change occurred between December 30, 2023, and March 30, 2024, with the debt to equity ratio increasing from 0.04 to 0.07. This represents a significant relative increase in debt compared to equity, warranting further investigation into the reasons behind this change. The subsequent quarters show a stabilization of the ratio, but at a higher level than previously observed.

The debt to equity ratio, incorporating operating lease liabilities, demonstrates a generally stable profile over the observed period, with a notable increase in the most recent quarters. Initially, the ratio remained low, fluctuating between 0.04 and 0.06 from March 2022 through December 2023. A significant upward movement is then observed, peaking at 0.08 in March 2025 before decreasing slightly to 0.06 by December 2025.

Initial Stability (Mar 26, 2022 – Dec 30, 2023)

From the beginning of the period through the end of 2023, the debt to equity ratio remained relatively consistent, indicating a stable capital structure. Total debt, including operating lease liability, experienced some fluctuation, but was consistently outweighed by stockholders’ equity, resulting in a low ratio. This suggests a conservative financing approach during this timeframe.

Increase in Leverage (Mar 30, 2024 – Mar 29, 2025)

Starting in March 2024, the ratio begins to increase, reaching 0.08 by March 2025. This increase is primarily driven by a substantial rise in total debt, from approximately US$2,200 million to US$4,731 million, while stockholders’ equity experienced a more moderate increase. This suggests the company took on additional debt financing, potentially for investment or acquisitions.

Recent Moderation (Jun 28, 2025 – Dec 27, 2025)

Following the peak in March 2025, the debt to equity ratio experienced a slight decrease, settling at 0.06 by December 2025. This is attributable to a reduction in total debt, from US$4,731 million to US$3,847 million, coupled with continued growth in stockholders’ equity. This indicates a partial reversal of the increased leverage observed earlier in the year.

Overall, the trend suggests a shift towards increased reliance on debt financing in the latter part of the analyzed period, followed by a minor adjustment towards a more balanced capital structure. Continued monitoring of this ratio is recommended to assess the long-term implications of these changes.

The debt to capital ratio for the analyzed period demonstrates a generally stable profile with a notable increase in later periods. Initially, the ratio remained low, fluctuating between 0.03 and 0.05 from March 2022 through December 2023. A significant increase is then observed, rising to 0.07 in March 2025, indicating a proportionally larger amount of debt relative to capital.

Initial Stability (Mar 26, 2022 – Dec 30, 2023)

From the beginning of the observed period through December 2023, the debt to capital ratio exhibited minimal variation. It consistently remained below 0.05, suggesting a conservative capital structure with a relatively small proportion of financing derived from debt. This indicates a reliance on equity or internally generated funds.

Increase in Leverage (Mar 30, 2024 – Dec 27, 2025)

Starting in March 2024, the debt to capital ratio began to increase. The ratio reached 0.07 in March 2025, and remained at 0.05 through December 2025. This suggests a shift towards increased leverage, potentially indicating strategic investments, acquisitions, or a change in financing strategy. The increase warrants further investigation to understand the underlying reasons and potential implications for financial risk.

The observed trend suggests a potential change in the company’s financial strategy, moving from a position of low leverage to one with a greater reliance on debt financing. While the ratio remains relatively modest, the upward trend should be monitored to assess its impact on long-term financial stability and flexibility.

Total Debt and Total Capital Trends

Total debt decreased significantly between December 2023 and June 2024, from US$2,468 million to US$1,719 million. Total capital remained relatively stable throughout the period, with a gradual increase from US$57,120 million in March 2022 to US$66,221 million in December 2025. The increase in the debt to capital ratio is therefore primarily driven by the subsequent increase in total debt from March 2024 onwards, rather than a decrease in total capital.

The debt to capital ratio, inclusive of operating lease liabilities, demonstrates a period of stability followed by a notable shift. Throughout the first nine quarters presented, the ratio remained consistently at approximately 0.05. However, a significant increase is observed in the subsequent periods.

Initial Stability (Mar 26, 2022 – Sep 30, 2023)

From March 26, 2022, through September 30, 2023, the debt to capital ratio fluctuated minimally around 0.05. This indicates a consistent capital structure with a relatively stable level of debt financing compared to equity and other capital sources. Total debt remained relatively flat during this period, while total capital experienced only minor variations.

Increase in Leverage (Dec 30, 2023 – Dec 27, 2025)

Beginning December 30, 2023, the ratio began to increase. It reached 0.08 by March 29, 2025, before decreasing slightly to 0.06 by December 27, 2025. This suggests an increase in the company’s reliance on debt financing relative to its capital base. The increase in the ratio correlates with a substantial rise in total debt, from US$3,003 million in December 2023 to US$4,731 million in March 2025, while total capital also increased, but at a slower rate.

Trend Analysis

The observed trend indicates a shift in the company’s financial leverage. While initially maintaining a conservative capital structure, the company appears to have taken on more debt in recent quarters. This could be due to various factors, including investment in growth initiatives, acquisitions, or changes in financing strategy. Further investigation into the specific uses of the increased debt would be necessary to fully understand the implications of this change.

The increase in the debt to capital ratio warrants monitoring to assess its potential impact on the company’s financial risk profile and future performance. Continued increases could signal heightened financial risk, while a stabilization or decrease would suggest a more controlled approach to leverage.

The debt-to-assets ratio for the analyzed period demonstrates a generally stable profile with a notable shift towards the end of the observed timeframe. Initially, the ratio remained consistently low, fluctuating within a narrow range before exhibiting a more pronounced change.

Initial Stability (Mar 26, 2022 – Dec 30, 2023)

From March 26, 2022, through December 30, 2023, the debt-to-assets ratio remained remarkably consistent, hovering around 0.03 to 0.04. This indicates a relatively stable capital structure during this period, with debt representing a small percentage of total assets. Total debt experienced some fluctuation, increasing from US$1,787 million to US$2,777 million before decreasing again to US$2,468 million, but this was largely offset by concurrent changes in total assets, which remained between US$66,915 million and US$67,885 million.

Increase in Leverage (Mar 30, 2024 – Dec 27, 2025)

A significant increase in the debt-to-assets ratio is observed beginning with the period ending March 30, 2024. The ratio rose to 0.06, driven by a substantial increase in total debt to US$4,164 million, while total assets increased to US$71,550 million. Subsequent quarters show a decrease in total debt, reaching US$3,222 million by December 27, 2025. However, the ratio remained elevated compared to the prior period, fluctuating between 0.04 and 0.06. Total assets also increased over this period, reaching US$76,926 million by December 27, 2025.

Overall Trend

The overall trend indicates a period of low and stable leverage followed by a notable increase in debt relative to assets. While debt levels decreased from the peak in March 2024, the ratio remained higher than the levels observed before March 2024, suggesting a shift towards increased financial leverage. The increase in debt may indicate strategic investments, acquisitions, or other corporate actions requiring additional financing.

The observed changes in the debt-to-assets ratio warrant further investigation to understand the underlying drivers and potential implications for the company’s financial risk profile.

The debt to assets ratio, including operating lease liabilities, demonstrates a generally stable profile over the observed period, with a notable increase in the most recent quarters. Initially, the ratio remained low, fluctuating between 3% and 5% from March 2022 through December 2023. A significant increase is then observed, peaking at 7% in March 2025, before decreasing slightly to 5% by December 2025.

Initial Stability (Mar 26, 2022 – Dec 30, 2023)

From the beginning of the period through December 2023, the ratio remained relatively consistent, ranging from 0.03 to 0.05. This indicates a conservative capital structure with a low reliance on debt financing relative to the company’s asset base. Total debt remained relatively flat during this period, while total assets experienced minor fluctuations.

Increase in Leverage (Mar 30, 2024 – Mar 29, 2025)

Starting in March 2024, the debt to assets ratio began to increase. This rise is primarily driven by a substantial increase in total debt, from approximately US$2.2 billion to US$4.7 billion, while total assets increased at a slower pace. The ratio reached its highest point of 0.07 in March 2025, suggesting a more leveraged financial position.

Recent Moderation (Jun 28, 2025 – Dec 27, 2025)

Following the peak in March 2025, the ratio experienced a slight decrease, settling at 0.05 by December 2025. This suggests a partial reversal of the increased leverage, potentially due to debt repayment or asset growth. However, the ratio remains higher than levels observed earlier in the period.

Overall, the trend indicates a shift towards increased debt financing in the latter part of the observed timeframe. While the ratio remains within a reasonable range, the recent increase warrants monitoring to assess the sustainability of the company’s capital structure and its ability to meet its financial obligations.

The financial leverage ratio for the analyzed period demonstrates a generally stable pattern with minor fluctuations. Initially, the ratio exhibits a slight increasing trend, followed by a period of relative stability, and then a modest increase before concluding with a slight decrease. This suggests a consistent, though not dramatically changing, reliance on financial leverage.

Initial Trend (Mar 26, 2022 – Sep 24, 2022)

The financial leverage ratio increased from 1.21 to 1.24 over this period. This indicates a gradual increase in the proportion of assets financed by debt relative to equity. While not substantial, this trend suggests a slightly more aggressive financing approach during these quarters.

Period of Stability (Sep 24, 2022 – Dec 31, 2022)

From September 2022 to December 2022, the ratio remained relatively stable, fluctuating between 1.23 and 1.24. This suggests a pause in the increasing trend, indicating a balanced approach to financing.

Subsequent Stability and Slight Increase (Apr 1, 2023 – Mar 30, 2024)

The ratio remained largely consistent, hovering around 1.21 to 1.24. A slight downward movement to 1.20 is observed in June 2024, but it quickly recovers. This period demonstrates a continued preference for a consistent capital structure.

Recent Trend (Mar 30, 2024 – Dec 27, 2025)

The ratio increased from 1.24 to 1.26, peaking in September 2025, before decreasing to 1.22 by December 2025. This suggests a recent, albeit small, increase in financial leverage, followed by a slight reduction. The overall change within this timeframe is minimal.

Throughout the analyzed period, the financial leverage ratio remained within a narrow range, indicating a controlled approach to debt financing. The observed fluctuations do not suggest any significant shifts in the company’s financing strategy. Total assets and stockholders’ equity both increased over the period, but the financial leverage ratio remained relatively constant, indicating that debt and equity financing grew at similar rates.

The interest coverage ratio exhibits considerable fluctuation over the analyzed period, spanning from March 2022 to December 2025. Initially strong, the ratio declines significantly before recovering and ultimately demonstrating a positive trend towards the end of the period.

Initial Strength and Subsequent Decline (Mar 26, 2022 – Dec 31, 2022)

The interest coverage ratio begins at a high of 104.42, indicating a substantial ability to meet interest obligations. However, a consistent downward trend is observed through the end of 2022, falling to 14.61. This decline suggests a weakening capacity to cover interest expenses, potentially due to decreasing earnings or increasing interest expense.

Volatility and Recovery (Apr 1, 2023 – Jun 29, 2024)

The first half of 2023 shows significant volatility. The ratio briefly turns negative in July 2023 (-2.15), indicating that earnings before interest and tax were insufficient to cover interest expense. A recovery begins in September 2023, continuing through June 2024, reaching 10.78. This suggests improving profitability and a restored ability to service debt.

Sustained Improvement (Sep 28, 2024 – Dec 27, 2025)

From September 2024 onwards, the interest coverage ratio demonstrates a clear upward trend, increasing from 15.91 to 32.80 by December 2025. This sustained improvement indicates a strengthening financial position and a comfortable margin of safety for meeting interest obligations. The ratio nearly triples over this period, suggesting a significant enhancement in the company’s ability to manage its debt.

The fluctuations in the ratio correlate with changes in earnings before interest and tax. Periods of declining EBIT directly correspond with lower interest coverage, while increases in EBIT are associated with improvements in the ratio. Interest expense remains relatively stable throughout the period, making EBIT the primary driver of the observed trends.