Few companies are as hotly debated across the financial world as Advanced Micro Devices (NYSE: AMD). The company is a perennial small fry, always chasing processor kingpin Intel (Nasdaq: INTC). However, AMD has shown flashes of brilliance, like when it overtook Intel's technology middecade and brought the rivalry between the two to a new bitter level.

With AMD in the midst of its most ambitious processor changes in at least a half-decade, should investors be watching the company more closely? Here are several positive and negative trends to watch for at AMD in the coming months and years.

 What to watch for: The good

  • AMD's new lineup of chips is a much more ambitious processor upgrade than investors are used to. The company has long trumpeted "Fusion," its integration of powerful -- and superior relative to Intel -- graphics processors with central processors. Fusion products targeting lower-end notebooks were launched in January, while additional models targeting other areas, like high-end desktops, will be launched throughout the rest of the year. On the server side, AMD is readying chips based on its new "Bulldozer" architecture to target Intel.
  • Speaking of the server processing side, AMD has struggled to gain traction in this space. Currently, Intel controls a staggering 94% of the server market and has been gaining market share. That's unfortunate, because servers are a higher-margin business that has been a key growth driver for Intel. Key technologies like cloud computing that created "computing on-demand" functions have increased demand for server processors. At a recent investor conference, Intel forecast that sales for its server line would grow at 15% compounded growth through 2015, much higher than forecasts in desktop PCs. With its recent launch of new server chips, small gains in server market share could turn into outsized profit increases for AMD.

What to watch for: The bad

  • As much as near-term trends favor AMD, Intel still possesses the longer-term strengths within the processor market. Intel recently announced a new "Tri-Gate Technology" that could once again give it a durable advantage over AMD in the high-growth server market and also make the company more competitive in smartphones
  • Recently, AMD CEO Dirk Meyer was shown the door. While reasons for his departure aren't fully known, all signs point to a board that was upset with the company's mobile direction. AMD is currently uncompetitive in smartphones and tablets. After disappointing first-quarter figures that showed U.S. shipments of PCs were down 10%, it's clearer that AMD's lack of progress in mobile could prove to be a larger sticking point in future quarters. If mobile devices like smartphones and tablets sap PC growth, AMD will need significant market share increases against Intel in PCs and servers to continue growing.

Final thoughts
AMD has tremendous amounts of potential in the near term, but Intel's continued advantages, such as its larger R&D budget and future advanced technologies, remain. The best way to stay ahead of the opportunities and threats facing AMD is to keep up with the news surrounding the company. The Motley Fool recently introduced a free My Watchlist feature that allows users to stay ahead of the curve and receive up-to-date news on companies like AMD, or any of its competitors. To get recent AMD news and analysis, add the company to your watchlist today:

Eric Bleeker owns no shares of companies listed above. Motley Fool newsletter services have recommended buying shares of and creating a diagonal call position in Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.