A volatile history has discouraged many investors from taking any position in Advanced Micro Devices, (NASDAQ:AMD). In previous years, it has suffered from a declining market share in the PC market as competitors continued their efforts to drive the company out. However, few investors seem to be willing to credit AMD for the major strides it has made in restructuring its business and returning itself to profitability. Rather than investing heavily in a futile attempt to regain its position in the PC market (which is already a dying market, in any case), AMD has focused its efforts on stepping into emerging markets and securing its share of these markets early on.

Instead of focusing on AMD's declining presence in the PC market, investors should be looking at the new developments and the new trajectory this company has undertaken.

Getting itself out of a slump
In another step toward securing its share of the embedded market, AMD announced a new agreement with Mentor Graphics Corporation (NASDAQ:MENT) to expand the availability of open-source embedded Linux-based development for AMD's line of heterogeneous and multi-core processors. The new offerings are also intended to simplify the process for embedded developers.

News of this deal pushed the company's stock above $4 per share on the first of April. However, with a five-year history of volatility and a relatively stagnant past three months, AMD has to do more than that to prove itself a buy.

In order to remain competitive, AMD has had to make some strategic changes to its business plan and the embedded market seems like the right place for it to go since it is wide enough, sparsely populated with companies, and in need of more variety for consumers and enterprise customers alike.

The agreement with Mentor Graphics Corporation will help secure AMD's position and add to a sustainable, long-term business plan that should help pull the company out of its multiyear slump and bring it into a new upswing.

Significant strides in graphics
In the second branch of the company's two-part business plan (computing solutions and graphics), there has been progress as well. On April 8, AMD launched a fast, powerful, new graphics card, which is claimed to be the best in the world to date.

The announcement resulted in a more than 2% boost to the AMD stock and should continue to increase the market value as game developers and enthusiasts alike drum up excitement about the new technology.

Due to go on sale later this month, the company's graphics business is set to see some substantial gains in 2014 as the new graphics card will be used in a variety of gaming consoles, personal computers, and even the new Mac Pro from Apple. AMD may even be able to convince Apple to use the new graphics card in its other upcoming releases such as the MacBook and the iMac. While Apple is currently using graphics cards from other companies for many of its devices, AMD's competitively priced (and potentially more powerful) Radeon graphics card should seduce Apple to switch over.

The revised deal with GlobalFoundries
Due to its growing prospects for 2014 in both its computing solutions business and its graphics business, AMD has revised its purchase agreement (known as the Wafer Supply Agreement, or WSA) with its main supplier, GlobalFoundries. It has committed to purchasing $1.2 billion in products from the manufacturer over the course of 2014, up from the $960 million worth of products it purchased last year.

The increase in spending is not expected to affect the company's fiscal outlook as the potential increase in sales should help to keep AMD on track to meet its target profit margins for the year.

By refocusing its business strategy for the coming years, AMD has made itself, once again, an attractive stock for long term and enterprise investors. With the transformation of the company at such early stages, the current market price is a bargain as AMD shows every sign of returning to its former success. There is a lot of underrated potential to be found in this company and those who invest early on will see the biggest gains.