AMD (NYSE:AMD) is in considerably less trouble than people think, if you listen to CEO and Chairman Hector Ruiz. In fact, he thinks the company is coming up aces right about now.

CNBC Europe airs an interview with the affable CEO tonight, in which he talks about everything under the sun -- his own start from Mexican poverty before launching into research and management positions with Texas Instruments (NYSE:TXN) and Motorola (NYSE:MOT), the myopic focus of the financial markets, and why AMD wanted money from Abu Dhabi.

But above all else, we get a better picture of how the company got caught in the "perfect storm of 2007," and why the road ahead looks much smoother.

The perfect storm
At the end of 2006, AMD was feeling great. The Opteron and Athlon 64 chips were beating up on their Intel (NASDAQ:INTC) counterparts and stealing market share at every turn. The balance sheet was flush with cash, and Ruiz and his team decided to invest it all in a radical acquisition of Canadian graphics specialist ATI.

As Ruiz explained it to CNBC Europe, the plan was to launch a new graphics chip that would "take that market by storm," then a range of quad-core CPUs that would take that market "by storm," and ride Motorola's next wave of handsets with AMD inside to new riches. And hopefully Dell (NASDAQ:DELL) would start selling AMD-based computers at some point.

That's when the storm hit. Motorola could hardly give its phones away. Dell did indeed come around to selling AMD systems, but then ran into problems of its own and lost the PC leadership title to Hewlett-Packard (NYSE:HPQ). And the ATI integration dragged its proverbial feet, delaying the next-generation Radeon release by six months. The quad-core Barcelona chip came in late, too, and by then Intel already had a very competitive four-core solution on the market. And then the entire chip sector fell out of favor with Mr. Market.

So some of this bad weather was beyond AMD's control, but other parts started with misfires inside AMD. "We didn't execute on the ATI integration," Ruiz said.

The battle cry for 2008 is "Return to profitability!" Barcelona is on the market now, and manufacturing yields are ramping up. "Customers are anxious to get it," Ruiz told CNBC Europe host Simon Hobbs, and the new Radeon graphics chips have also met with enthusiastic responses from system builders. The new products are "phenomenal, just late." The handheld strategy no longer lives and dies with a flagging Motorola, as other gadget designers, like Hitachi (NYSE:HIT) and Samsung, have chosen AMD chips for their new designs.

"What a bargain!" Ruiz exclaimed with reference to the below-$10 share price. "We must be the best buy in the industry right now."

It's important for any large company to focus on the long term, but particularly so for a business that depends so heavily on multiyear design and development processes. "I don't give a damn" about short-sighted analysts and investors, says Ruiz. Those concerns can prevent some CEOs from doing what's right for their companies. "What we have done in 2007 has positioned our company for success, beyond what anybody thought possible for the future."

Take the long view
It's not just hot air -- Ruiz can back up his long-term talk with evidence. It took five years of constant nudging and prodding to coax Michael Dell into sourcing chips from multiple providers. And Dirk Meyer has been groomed as Ruiz's successor ever since his promotion to COO in 2005. A proper succession plan should help AMD maintain some continuity in its business plan amid top-level changes.

If Ruiz can deliver on the promises he's making here, AMD does look like a massive bargain today. And with the long, painful price war seemingly behind us, he might not even have to fire on all cylinders to get back to black earnings figures.

It all depends on what the competition does, of course, but Ruiz is used to fighting that battle. AMD founder Jerry Saunders warned him before Ruiz took the job: "You don't know what tough is until you compete with Intel." Today, he can only smirk that "it was a lot tougher than he told me."

Keep your eyes on the horizon, Hector. You'll do fine.

Further Foolishness:

Dell and Intel are Motley Fool Inside Value picks; Dell is also a Stock Advisor recommendation.

Fool contributor Anders Bylund is an AMD shareholder, but holds no position in any of the other companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure will always be on time and under budget.