AMD (NASDAQ:AMD), one of the hottest chip stocks of 2016, slumped more than 10% this year as rivals Intel (NASDAQ:INTC) and NVIDIA (NASDAQ:NVDA) struck back with new chips. On the surface, AMD's growth still looks solid -- analysts expect its revenue to rise 23% this year and for it to achieve non-GAAP profitability after two straight years of losses.

However, its outlook for 2018 looks murkier. Analysts expect its sales growth to slow to 12% for the year but for its non-GAAP earnings to nearly triple on tighter cost controls. Let's examine the four main areas for AMD's businesses investors should watch next year.

1. New Ryzen CPUs

AMD scored a brief victory earlier this year with its new Ryzen CPUs, which offered comparable performance as Intel's current-generation Kaby Lake CPUs at lower prices. AMD also launched the high-end Threadripper (two eight-core Ryzen CPUs linked by its Infinity Fabric), and challenged Intel's near-monopoly in data centers with its Epyc chips.

However, Intel subsequently struck back with new Coffee Lake chips in its final 14nm Skylake refresh, which widened the gap against Ryzen in desktop benchmarks. It also launched the premium Skylake-X to counter Threadripper, and unveiled next-gen Xeon Phi CPUs for data centers.

But AMD isn't down for the count. It will launch its Raven Ridge APUs -- which combine Ryzen CPUs with Vega GPUs -- for laptops by the end of the year. Reports also indicate that its new 12nm Ryzen 2 chips could arrive next February. Those chips might keep AMD safe until Intel launches its 10nm Cannonlake chips in late 2018.

2. New Vega GPUs

AMD's situation in GPUs is similar. Its Radeon cards briefly gained a price advantage against NVIDIA's GeForce cards last year, but NVIDIA struck back in the low-end market with powerful budget cards like the GTX 1050.

AMD launched its next-gen Vega GPUs earlier this year, but they merely offered comparable performance to NVIDIA's current-gen Pascal GPUs at similar prices. This was an odd move for AMD, which usually targeted lower price points than NVIDIA. To make matters worse, NVIDIA then unveiled Volta, its 12nm successor to the 14nm-16nm Pascal.

Volta-based GPUs are currently only available for data center customers, but NVIDIA plans to launch the consumer versions next year. AMD plans to counter Volta with its next-generation 12nm Vega GPUs next year, but it could face a tough uphill battle.

Lastly, investors should also keep an eye on the unpredictable cryptocurrency mining market, which could lift demand for both NVIDIA and AMD GPUs next year.

3. A risky deal with Intel

In a strange twist, AMD recently partnered with Intel to integrate its Radeon graphics into Intel's upcoming chipset for laptops. This partnership is risky, since it could curb demand for AMD's own Raven Ridge APUs.

Intel also recently hired Raja Koduri, AMD's former Radeon chief, to lead its new Core and Visual Computing Group to create discrete GPUs. That's a troubling development for both AMD and NVIDIA, which hold a duopoly in the discrete GPU market.

Therefore, it doesn't seem wise for AMD to work closely with Intel, even if both companies want to throttle NVIDIA's growth. Investors should see where AMD's partnership with Intel leads next year and whether Intel's discrete GPUs will become a threat to its Radeon cards.

4. More EESC wins

AMD's EESC (Enterprise, Embedded, and Semi-Custom) business became a pillar of growth over the past few years as it supplied semi-custom SoCs to leading gaming consoles like the Xbox One and PS4. But with both consoles now four years old, the EESC business needs fresh catalysts.

The recent updates to the Xbox One and PS4 might boost the unit's sales. Microsoft introduced the smaller Xbox One S and the more powerful Xbox One X, while Sony launched the comparable PS4 Slim and PS4 Pro.

Meanwhile, other new niche devices, like the Ataribox, also use AMD's custom SoCs. If these catalysts generate fresh growth for the EESC business, it could offset any softness in its core Computing and Graphics (CPU and GPU) business.

The bottom line

I think AMD could rebound next year if it plays its cards right. However, the stock could also keep slipping if the next-gen Ryzen and Vega chips don't live up to expectations.

AMD also isn't cheap at 28 times next year's earnings, which is much higher than Intel's forward P/E of 13. Therefore, I'll keep an eye on AMD, but I don't plan to buy any shares until it proves that it can withstand the competition from Intel and NVIDIA.