Backtest: Buy and Hold AMD (Advanced Micro Devices, Inc.)

This analysis evaluates a buy-and-hold strategy over the past 45 years, providing a historical perspective on AMD's performance from 1980-03-17 to 2025-07-03.

Note: This simulation uses adjusted close prices, meaning all historical prices have been retroactively adjusted for splits and dividends. To achieve similar results in practice, you would need to reinvest all dividends automatically as they are paid.

Performance Overview

Starting with an initial capital of $10,000.00, we purchased shares of AMD on 1980-03-17, at a price of $3.15 per share (adjusted for splits and dividends). No trading, no adjustments — just a simple buy-and-hold approach.

We held the position continuously through every market twist and turn, never selling. As of 2025-07-03, the price of AMD had risen to $137.91. While we didn't sell, we can still assess the performance by calculating the current value of the investment: $438,389.46 — a total gain of 4,283.89%.

This translates into an annualized return of 8.70% over the entire period. This return is modest — positive, but below the long-term averages of broad-market investments. It may reflect a conservative strategy or a challenging market period.

Drawdown and Risk

The maximum drawdown recorded during this period was 96.59%. This drawdown began after a peak price of $47.50 on 2000-06-21, and reached its lowest point on 2015-07-27 when the price fell to $1.62. The drawdown lasted for 5514 days.

This investment experienced an extreme decline, reflecting exceptional volatility or exposure to severe market stress. Such drawdowns are typically seen in early-stage, speculative, or high-beta assets. The maximum drawdown lasted over three years — a very long decline that would have tested even the most patient investors. Such extended recoveries are rare but not impossible during major structural bear markets.

The Calmar Ratio — annualized return divided by maximum drawdown — was 0.09, reflecting the tradeoff between return and volatility.

A very weak ratio, suggesting the strategy took substantial risk for minimal return.