Advanced Micro Devices (NASDAQ:AMD) designs and sells general-purpose PC processors, stand-alone graphics processors, and, increasingly, customized chips for various specialized applications. 

Nearly 20% of AMD's outstanding shares are sold short, which is a likely reason for the stock's continued volatility. However, while both bulls and bears make good points, here are three reasons the company's stock could move higher. 

Potential exposure increase in business PCs
AMD CEO Rory Read remarked on the company's most recent earnings call, "The overall PC market has strengthened, largely driven by the commercial space, although there is continued weakness in the consumer PC market."

This has proved to be a problem for AMD. Last quarter, rival Intel (NASDAQ:INTC) -- which derives approximately 40% of its PC revenue from the sale of chips into business PCs -- grew its PC-related revenue by 6% year over year last quarter while AMD saw its Computing Solutions revenue drop 20% year over year in that time.

However, AMD hopes that its new Pro A-Series APUs can reverse its fortunes in this segment of the PC market.

AMD was quick to highlight that Hewlett-Packard's Elite 700 Series of business PCs are powered by these new Pro A-Series chips. Further, AMD's COO Lisa Su indicated on the company's most recent call that additional Pro A-Series based systems should come to market during the second half of the year.

Additionally, Read noted on the call that AMD "remain[s] on track to more than double the number of AMD-based commercial offerings available by the end of the year." 

If AMD can succeed in gaining share here (winning designs is a good start, but the sell-through of those designs will be important to watch), this could not only improve its PC processor revenue, but it could also help margin as well, as businesses often buy a richer product mix than consumers do.

More semi-custom wins on tap
Though AMD benefited immensely from its deals with Microsoft and Sony to supply chips for the Xbox One and PlayStation 4, respectively, AMD will need to win more semi-custom deals if it is to meaningfully grow this business in the coming years.

According to Su, AMD is "on track to announce one or two confidential design wins in 2014."

The size, scope, and margin profiles of these deals is not yet apparent to investors, but Saeid Moshkelani, vice president of AMD's semi-custom business, noted in an interview with Barron's that such semi-custom wins would need to be worth "at least $100 million in annual revenue for [AMD] to go for it."

Additionally, in AMD's second-quarter earnings slide deck, the company suggested that it is "targeting 1-2 total new [semi-custom] wins per year." If AMD can rack up a strong portfolio of contracts worth over $100 million per year, then, over time, semi-custom could yield a sustainable and growing revenue stream.

Embedded opportunity could be interesting
In its most recently published investor presentation, AMD showed an interesting slide showing what types of products it can sell into via its embedded business.

Source: AMD. 

AMD is not the only company that wants a piece of this embedded pie, but given its strong graphics IP, it could be poised to do well in segments that require high graphics performance -- gaming machines and potentially medical imaging being the obvious examples.

How large these opportunities turn out to be in terms of revenue and gross profit dollars remains to be seen, but if AMD can grab a reasonable portion of new embedded business, then this could add meaningfully to its current annual revenue base of just under $6 billion.