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A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.

If Wayne Gretzky ever made a valuable contribution to the world of investing, he probably didn't know it. That notwithstanding, his words are still just as relevant to the stock market as they are to hockey.

As it stands right now, Advanced Micro Devices, Inc. (NYSE:AMD) is nothing more than a mediocre, unprofitable chipmaker. A "good" investor might play it as it is and see AMD as only a mediocre, unprofitable chipmaker. However, a "great" investor might look at the company in a different light and consider where the company is headed, and in AMD's case that could be up. While the company has had its fair share of issues, things are starting to look up.

The Next-Gen Consoles

As the rivalry between Microsoft (NASDAQ:MSFT), Sony (NYSE:SNE), and Nintendo (OTCPK:NTDOY) heats up in the game console space and competition strengthens, the opposite is true for rival chipmakers. As opposed to the last generation consoles, there is only one definitive champion of the chips: AMD.

Xbox: Microsoft's last generation Xbox 360, released in November of 2005, utilized an IBM CPU and an ATI GPU, while the next generation Xbox One features a custom made AMD CPU and an AMD GPU.

PlayStation: Sony's last generation PS3 featured a Cell BE CPU designed jointly by IBM, Toshiba (OTCPK:TOSBF), and Sony and an Nvidia (NASDAQ:NVDA) GPU. The upcoming PS4 is set to house both an AMD CPU and GPU.

Wii: Nintendo's Wii, released in November 2006, utilized an IBM CPU and an ATI GPU. While the recently released Wii U sticks with an IBM CPU, this time it is alongside an AMD GPU.

(*Keep in mind that ATI was purchased by AMD in October 2006.)

In this wave of new consoles, AMD has clawed its way to the top and pushed nearly all the major players out of the console CPU and GPU space, save for IBM, which has maintained a hardly noticeable presence in the Wii U. But what does this all mean for AMD? Two words: market share. Especially against its current chief rival in graphics chips, Nvidia, market share is crucial for AMD's turnaround. If last generation's console statistics serve as an indicator, AMD will significantly boost its presence in niche markets: 77.57 million Xbox 360s sold, 77.71 million PS3s sold, 99.9 million Wiis sold.

The Mac Pro

While Apple's (NASDAQ:AAPL) Mac Pro is definitely geared towards a specific type of consumer (the type with too much money and insatiable computing needs), the tidbits that we learned from Apple's World Wide Developers Conference keynote at the beginning of the month indicate some potential good news for AMD. While the last generation Mac Pro, and the generation before it, feature relatively stale ATI Radeon graphics cards, Apple made a switch back to Nvidia GPUs in the MacBook Pro line of notebooks in 2012 after going with AMD to power its lineup in 2011. So why then is Apple sticking with AMD to power the Mac Pro while relying on Nvidia for its notebook line? It's definitely feasible that Apple is planning on having the two rivals live under the same roof at Apple stores across the globe, but is it possible that Apple is planning on switching back to AMD GPUs to power the entire Mac lineup? Some would argue against this assertion, which is understandable; Apple is not opposed to sourcing components from different firms.

Pure Speculation: I'd like to take a minute just to speculate. Let's say that Apple does make the switch back to AMD graphics for the entire Mac lineup. Where's the evidence? Well there is no evidence per se, but conjecture (and lots of it):

Many were suspecting a MacBook Pro refresh at Apple's recently held WWDC; we didn't get one. There's really no reason why Apple shouldn't have announced a refreshed MacBook Pro except for one: production bottlenecks. One component of particular interest is the display; it's very well possible that Apple had production issues with the high-end display that goes into the MacBook Pro with Retina Display. That is the most logical explanation, but it may not be the only. What if Apple is waiting for a certain chipmaker, who's taking on the very difficult task of restructuring, to supply components? AMD, after all, has a great deal on its plate at the moment (as you'll see in the next section), which could be a possible explanation of the delay in the announcement of the next-generation MacBook Pro family. Again, this is all conjecture, though logical in my mind. So, on the off chance that this is the case, what would that mean for AMD? Well, going along with the theme of market share, it would simply mean more market share. This is crucial for AMD right now, and while winning back Cupertino's love wouldn't significantly help the company's bottom line, it serves as an indicator of AMD's competitive viability.

Server Strategy

Just the other day the company announced its future plans to tackle the server biz along with a slew of new processors that are expected to hit the market in 2014. The star of the show is the company's planned "Seattle" processor, which is based on ARM Holdings' (NASDAQ:ARMH) 64-bit ARM Cortex-A57 architecture. Though AMD isn't afraid to experiment with ARM-x86 hybrid processors, the company is finally taking the leap into the 64-bit ARM server chip sector.

So what are the benefits of ARM?: Compared to x86 processors, ARM processors consume considerably less power and are also significantly cheaper to produce than x86 chips. Put succinctly by Andrew Feldman, general manager of AMD's server business unit:

ARM has lower power, but I don't think, in the end, that it wins because it is lower power. It wins because it is lower cost. It takes the process of making a CPU down from three and a half years and $350m and $400m down to 18 months and $30m.

AMD's foray into the ARM server chip business isn't unaccompanied, though, as Applied Micro Circuits (NASDAQ:AMCC) is also building a presence in the space, although Applied Micro is not nearly as established as AMD. While AMD is trying to gain market share in this niche market, it hasn't yet given up on its endeavors in the x86 market that is absolutely dominated by Intel (NASDAQ:INTC). While AMD's new "Warsaw" and "Berlin" x86 chips are unlikely to chip away at Intel's market share, it is important that the company maintains some level of diversification, even if it is somewhat limited.

Things Are Looking Up

All being said, it definitely seems that there is a light at the end of the tunnel for AMD. Though the company has had its troubles, real progress is being made in establishing a viable business plan and entering new niche markets. No, AMD will not dethrone Intel as the king of server chips. And no, AMD will not erase Nvidia off of the face of the earth. But AMD is doing little things now that could have big impacts later: AMD is entering the ARM server chip market, AMD is dominating the consoles, AMD is inside the highest-end Apple computer of the future. So will AMD rule the world one day, just as Intel seems to be doing? Probably not. But AMD is taking the right steps to get on Wall Street's good side, and that could result in huge gains for investors who see the company for what it could be, rather than what it is.

Source: Advanced Micro Devices: The Chipmaker Of The Future?

Additional disclosure: I may initiate a long position in AMD over the next 72 hours.