With shares at a six-month high,

Advanced Micro Devices

(AMD) - Get Report

opens the semiconductor earnings season after the bell Wednesday amid a growing belief that demand is gaining momentum.

The stock, which closed Tuesday at $19.37, has advanced in all seven trading sessions this month and is up more than 30% since late April, so AMD's second-quarter report will go a long way in determining whether any upside remains.

Analysts expect AMD to lose 5 cents a share on sales of $1.22 billion, on average, according to Thomson First Call. The bottom-line range is wide, however, with expectations spanning a loss of 17 cents to earnings of 5 cents.

But posting a profit would be somewhat unusual, since AMD hasn't earned one since the third quarter of 2004, mostly because of struggles at its flash memory unit, which accounted for 36% of sales in the first quarter. After getting burned by the sector for two quarters in a row, AMD announced it would

pursue an initial public offering for its memory business, which is formally known as Spansion.

Consensus estimates currently expect AMD to return to profitability in the third quarter, but if the company can slide into the black one quarter earlier, shareholders will likely see it as a sign of even better things to come.

The first half of the year is typically weaker than the year's final six months for electronic component companies. Initial indications expect a seasonal increase in business during the back-to-school and holiday shopping periods.

As for the second-quarter report, AMD has only said microprocessor sales would be flat to slightly down; it hasn't disclosed expectations for Spansion. Investors, then, will be watching for initial revenue figures from the company's Turion laptop processors, traction on its Opteron processors, additional details on the Spansion IPO and overall gross margin expansion.

But perhaps most importantly, this year has been about AMD trying to distinguish itself from its primary rival,

Intel

(INTC) - Get Report

. No longer content to ape Intel's technology or its plans, AMD has now taken a controlling interest in its own destiny.

AMD's product road map has stayed consistent even as Intel shifted its lineup and introduction schedule. AMD stuck with its single-core processor plans for gaming chips -- even expanding its line -- as Intel introduced dual-core gaming chips.

And later this year, AMD's Opteron processors will act as the brains for a highly anticipated server line from

Sun Microsystems

(SUNW) - Get Report

, known as Galaxy.

But AMD hasn't stopped there. The Sunnyvale, Calif.-based company

launched antitrust claims against Intel last month in the U.S. and Japan, and an investigation by European regulators is ongoing. AMD has trod this legal ground before, but the company's technology lineup has never been this strong.

AMD is banking on its technological improvements -- and lack of commensurate market share gains -- as evidence of monopolistic behavior by Intel. A legal remedy is likely not imminent, but the legal maneuvering definitely signals a strategy shift for AMD to permanently boost its market share. AMD has launched a series of advertisements, as well as a dedicated Web site, to air its grievances to the public.

With more changes ahead -- the Spansion spin-off plans and ramifications from its new legal strategy -- AMD still has to prove to investors that it can translate technology into profits. The recent run higher in the company's stock raises the stakes even further.